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Indigo Cosmetics: Yardley Skin Even Targeted Coupon

May Cashback ClubCard MailingPost-Campaign ReportJune 2010

All content copyright © 5one 2001 - 2010. All rights reserved. Confidential.

Contents

• Introduction• Coupon Redemption & Response• Incremental Analysis• Immediate ROI• Conclusions & Recommendations

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Introduction

• 150 000 ClubCard customers targeted utilising 5one’s targeting tool

• Campaign period: 3 May – 4 June 2010• Both Protect and Steal customers targeted:

• 5,096 Protect• 144,904 Steal

• Reward level constructed tested:• R5 off when you buy 2 or more Yardley Skin even products. Normal prices range between R17.95 and R21.95.

Get R5 off any Vital product purchased • R3 off when you buy any Yardley Skin even product. Normal prices range between R17.95 and R21.95.

• Control group of look alike customers measured over the campaign period

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The Mailing

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Contents

• Introduction• Coupon Redemption & Response• Incremental Analysis• Immediate ROI• Conclusions & Recommendations

5

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Targeted Coupon: Redemption

Redemption: customers who bought featured product at the same time as handing in the coupon

How many mailants shopped the promoted products?

• Overall redemption rate is slightly below average, however due to the large number of Steal shoppers targeted: (above 1% is ‘good’ for Protect, 0.5% ‘good’ for Steal)

Coupon Mailed Redeemed Red. Rate

New R3 144,904 100 0.07%

Current R5 5,096 13 0.26%

TOTAL 150,000 113 0.08%

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Targeted Coupon: Response

Response: customers who bought featured product regardless of whether they handed in the coupon A more accurate metric for campaign success as the coupon acts as both a discount and marketing message.

• Overall response rate is excellent: 0.27% (above 2% is ‘good’ for Protect, above 1% for Steal)

• Response rate amongst Protect shoppers is good at 3%• Steal offer generating average response rate: Driving 250 new shoppers to

the brand.

Coupon Mailed Redeemed Red. Rate Responde

dResp. Rate

New R3 144,904 100 0.07% 250 0.17%

Current R5 5,096 13 0.26% 149 2.92%

TOTAL 150,000 113 0.08% 399 0.27%

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Contents

• Introduction• Coupon Redemption & Response• Incremental Analysis• Immediate ROI• Conclusions & Recommendations

8

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Incremental Shoppers

CouponMailed Resp. Rate

Responded

Control Resp. Rate

Incremental

Shoppers%

Incremental

New R3 0.17% 250 0.0% 250 100%

Current R5 2.92% 149 11.0% 0 0

TOTAL 0.27% 399 0.2% 0 0

• Overall the control group shopped at a substantially higher rate than targeted shoppers resulting in a lower % of incremental shoppers

Incremental analysis shows how total mailed responders would have shopped had they not received the mailing – essential in understanding actual effect of the campaign.How many shoppers were incremental?

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Incremental Units

How many more units were purchased?

• Due to high response rate from current customers more than 64% of total units purchased were incremental

Coupon Total Mailed Units

Incremental Units

% Incremental

New R3 300 300 100%

Current R5 172 0 0

TOTAL 472 300 64%

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Incremental Sales

How many more sales were achieved?

• Total mailed sales of R6k was achieved

Coupon Total Mailed Sales

IncrementalSales

% Incremental

Incremental / Responder

New R3 R 3,420 R 3,420 100% R 13.7

Current R5 R 2,833 0 0 0

TOTAL R6,253 R 3,420 55% R 8.6

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Contents

• Introduction• Coupon Redemption & Response• Incremental Analysis• Immediate ROI• Conclusions & Recommendations

12

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Immediate Return On Investment

• Overall ROI is below average: -109%

What was the immediate ROI of the targeted coupon based on Incremental sales?

CouponTotal

Mailed Sales

Incremental

SalesProduction

CostsGross Profit ROI

New R3 R 3,420 R 3,420 R 48,301 R -44,881 -93%

Current R5 R 2,833 0 R 1,699 R -1,699 -100%

TOTAL R6,253 R 3,420 R50,000 R -46,580 -109%

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Contents

• Introduction• Coupon Redemption & Response• Incremental Analysis• Immediate ROI• Conclusions & Recommendations

14

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• Overall campaign generated ideal response:• Redemption rate: 0.08% (113 shoppers)• Response rate: 0.27% (399 shoppers)

Campaign Summary

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1. Continue to use targeted coupons to invoke re-purchase and gain new shoppers to the brands

2. Test broader offer for new customers (less niched / fewer constraints)

3. In-depth analysis of what the Vital shopper looks like, how they shop across the range and what competitor products they are purchasing into

Recommendations

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Thank-youZakariya Patel – 5one AnalystZakariya.Pate@5one.co.za