Consumer Insights Unit

Applied Customer Analytics – Principles and Practice

Company Overview

Founded in 1966; based in Minneapolis, Minnesota

$50+ billion revenue, Fortune 100 company

World’s #1 Consumer Electronics retailer

4000 stores* in Americas, Europe and China

180,000 Employees

* 2430 Carphone Warehouse stores

Locations

STORE COUNTS

BEST BUY

U.S. 1092

Mexico 5

UK 2

Canada 66

GEEK SQUAD

Stand-Alone Stores 5

BEST BUY MOBILE

Stand-Alone Stores U.S. 98

Stand-Alone Stores Canada 4

FAMILY OF BRANDS

The Carphone Warehouse 2430

Five Star 158

Future Shop 144

Magnolia Audio Video 6

Pacific Sales 35

AudioVisions 3

The CIU Purpose and Mission

What is the value of Consumer Insight?

Consumer Insight is information about consumer behaviors, attitudes and values which is derived from research, employees, and data analysis and is directly relevant for the growth of a business

We define consumer insights as finished intelligence that drives the business.

CIU Mission Statement

To ensure locally relevant consumer insights are generated, shared, understood, and used in driving

business actions in service of the consumer and growth of the global

enterprise

CIU Vision Statement

Providing a clear, relevant, actionable, measurable, and trusted

view of the consumer to the enterprise

What CIU Analytics does

What CIU Analytics does

Happy Customers

CIU Analytics

CIU Analytics as a capability includes…

• Customer segmentation

• Purchase path and purchase basket analysis

• Descriptive and differential statistics

• Predictive modeling

• Constrained resource optimization

• Test and measurement

• Market share measurement

• Econometrics

What it takes to provide quality analysis

Translation/

Communication

Analytic Talent

Analytic Tools

Data Accessibility

Data Architecture

Hardware

We cannot do analytics on data we don’t have.

Stop Guessing:

Analytics Can Tell You Who Your Customers Are

Age + Income +

Geography Preferred Product

Categories Preferred Channel

Participation in Loyalty

Program Use of In-House

Credit Card Use of Service

Programs

Return / Exchange Behavior Breadth of

Categories Shopped

Length of Time as Customer

Recency + Frequency +

Value

Response to Media

Time until Repurchase in Key

Categories

Annual Spend Level

Annual Transactions

Econometric: Real-estate &

Unemployment

• Start with 30-40 modeled variables – “Feature Vectors”

• Each feature vector is like a gene, which describes a facet, or set of customer behavior traits

• 8-15 Feature Vectors are used to define Action Clusters, all 40 can be used to create sub-groups

Most segmentation approaches only focus

here

5-dimensional typical segmentation ≈ 16,000 views 12-dimensional Action Clusters ≈ 3,138,000,000,000 views 30 Feature Vectors ≈ 17,400,000,000,000,000,000,000,000,000,000 views

Case Study on Decision Optimization: Foresight

Foresight optimizes resource investment against the Action Cluster portfolio to maximize business objectives. It includes dimensions of customer strategies (or initiatives), media types and geography, and is constrained by budgets and policies.

Customer

Optimally Funds Across Action Clusters

Customer Strategies

Articulates and Optimally Funds Top Initiatives

Media Types

Computes Optimal Media Effectiveness

Annual Budget

Allocates Against Policy and Budget Constraints

Geography

Allocates to Stores / Regions / DMAs

Bounded By

Budget Constraints

Optimize

Across

Available Media

Optimize Across Identified

Strategies

Optimize Across Customer

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Optimize

Across

Geographies 80,000+ Total Decisions