A specialty multi-channel apparel retailer was using both brick-and-mortar and eCommerce to sell to its customer base. The client wanted to understand the “characteristics” of best customers both from behavior as well as from demographics perspectives.
Approach
Extracted and cleansed the customer behavior data across all channels and appended demographic variables from Experian
Developed multi-variate regression model to identify drivers of sales and validated model using CHAID
Used “Significant Drivers” from regression and CHAID to segment customer base using cluster analysis
Recommend segment specific strategies to increase sales
Results
Best Customers are multi-channel buyers (Catalog and in-store) from New England or the Northwest that lived more than 20 miles from the nearest store
Highest value segment represents a 523% gain over the average customer
Migrated 6% of the audience from average customer segment to higher value segments leading to 11% increase in overall sales
