A MATURITY MODEL FOR CUSTOMER

DATA VALUE MANAGEMENT

Expert Group Report Customer Data Value Management

January 2014

© Shopping 2020
The Experts of the Customer Data Value Management Group

Guido Fambach Janet Gerrits

Managing Director Sales EMEA Manager Business Intelligence
comScore Euretco

Piet Gouwens Lucien van der Hoeven

Business Development & Innov. Managing Director
Equens GfK Panel Services

Wouter Hulst Ingeborg Brandsma

Founder Marketing Comm. Executive
201 Connected Media Webservices.nl

Hanneke van Niele Alexander Pluim

CRM Manager CTO
Maxeda DIY BVA Auctions

Dave Rietveld Bart-Jan Sweers

Business Development & Innov. Senior Adviser
Equens PWC

© Shopping 2020 1
The Experts of the Customer Data Value Management Group

Mark van der Linden Marco van Putten

Head of Enterprise Benelux Director Business Dev. & ICT
Google BCC

Michiel Staal Ernst Gleijm

Marketing Manager Director Marketing & Sales
Cendris Innovam

Milan Wadher Karin Dekker

Director Analytics & Insights Markt Strategie/ Marketing
Ahold Achmea

Jeroen Koster Jaap van Oort

Channel Manager KRT Strategy Director
ATAG Nederland B.V. LBI The Netherlands

© Shopping 2020 2
Create a practical maturity model for retailers

In 2020 the retail landscape has changed. Retailers operate in a “digital world without
walls”. A world in which a successful sales process is equipped for the unique individual –
interaction and handling – with global sourcing and supply chains and a multichannel
interaction. Data is the key ingredient for successful retail business models. Data value
management: capability making the difference between success and failure.
The CDVM group has committed itself to deliver a practical maturity roadmap to retailers to
deliver data-driven value to both customers and the business.
▪ In the first phase of the research we define what CDVM is, the environment we operate
in, what the current state of data value management is and what are the lessons learned
and best practices. The first phase will give a good overview of where we are and where
we need to go to.
▪ In the second phase we will develop a practical maturity guide. The guide supports
retailers in their efforts to make their company more data-driven and helps retailers to
maximize the profitability of their customer base by offering customer value during the
entire client relationship.

© Shopping 2020 3
What do we mean with Customer Data Value Management?

Customer Data Value Management is a progressive approach to maximize the lifetime

customer value through the development and execution of data driven policies, practices and
procedures in all stages of client- retailer interaction.

• The retailer is looking to maximize the profitability of its customer base

• The client is looking for the right quality at the best price

© Shopping 2020 4
Retailer perspective:
Maximizing the Lifetime Profitability of your Customer Base

Growing the lifetime value of your customer base is key to enduring profit.
Studies have demonstrated that:

• A 5% increase in customer retention leads to a 25-95% increase in company profits.

• A 10% increase in (A) the number of sales opportunities you have, (B) the average deal value, (C)
your win rate and a 10% reduction of (D) the length of the sales cycle; increases the sales velocity
by 47% and therefore drives fast growth.

• A small increase of your average sale, frequency of buying and length of the client relationship
will lead to spectacular growth. Take a clothing retailer in example. The average customer comes
in 3 times a month, spends €30 each time and remains a customer for 2 years. The CLV looks like
this; € 30 x 3 x 12 x 2 = € 2160.
Increasing the average sale by 20%, the frequency to 4 times a month and the lifecycle to 2.5
years, will increase your CLV to € 4320. This is doubling your CLV!

Collecting and using data for all of the above will drive new insights
and business potential.

© Shopping 2020 5
Client perspective:
Getting the right quality at the best price

Studies have demonstrated that customers are buying when they experience:

• High quality of service

• The right product set
• The right price
• Timely delivery
• Easy return without additional costs
• Ownership of the buying process
• Clear and transparent sales process
• Trusted relationship

© Shopping 2020 6
CUSTOMER DATA VALUE MANAGEMENT
From the beginning to today

© Shopping 2020
Traditional Customer Value Management:
Knowing your Customer One-to-One

A hundred years ago, shops were

around the corner. The retailer knew
his customers often on a personal
basis and he knew the customers’
preferences as well as the
customers’ personal situation. The
customer data was stored in the
retailers’ mind.

The customer would buy from the

trusted retailer nearby in the
community they lived in.

The choice to buy from the florist

nearby was a given fact.

© Shopping 2020 8
When the region you service becomes bigger ...
your customer base will be bigger too

It is a challenge to know your customer one-to-

one and to deliver and communicate the right
proposition in time when one serves a larger
group of potential customers in a large region.

The retailer often does not know the customer

personally and operates in an open market of
competitors.

Data can provide the retailer the insights

needed to do things differently or do different
things with better results.

© Shopping 2020 9
Customer interactions are multiplying

Retailers see more

customers, whereas Online
Advertising
actually they are seeing
more interactions from the
App
same customer. Usage
Video

PC
TV
The one-to-one interactions
with cookies is leading to
missed opportunities. Gaming Server

Website Search
Good customer data is key
to value. Smart
POS
phone
Tablet

In Store Social

© Shopping 2020 10
Customer interactions are diversifying…
but it is still the same customer
Wishes she could order online at Uses e-coupons
Cherry lunch and get the shoes tomorrow
picks
sale items

Looks up Shares
competitive pictures
prices on of items
competitor for peer
sites review

Is a trend Very
setter in brand
her circle loyal
of friends
Is going to
Never shops Always blogs scream if she
anywhere else about every suit gets one more
he buys email
© Shopping 2020 11
Customer behavior is changing

Finding a better price online Smartphone owners Men and women have
remains a key reason significantly more likely to different priorities for
consumers showroom showroom show-rooming

72%
Consumer
Electronics
46% 56%
74% 47% Consumer
Electronics
27% Apparel 39%
Apparel

Smartphone Non-Smartphone
Price was better online Owner Owner Women Men
Q. Which of the following describe why you utilized Q. Based on this definition, have you ever done this activity? Q. Which of the following types of item have you bought online
showrooming? [showrooming] after using ‘showrooming?’

© Shopping122020 12
 Shopping tools are changing

Shopping Tools Evaluated

Source: comScore Survey – September 2012

“Traditional” Digital Mobile

Shopping Tools Shopping Tools Shopping Tools
• Direct mail • Deal of the day sites • Mobile brand websites
• Magazines • Digital coupons • Mobile coupons
• Newspapers • Facebook • Mobile location-based
• Radio • Online circulars services
• Recommendations from • Online customer • Mobile payments
friends and family reviews/ratings • Mobile retailer websites
• Television • Online search engine • Mobile search
• Printable shopping lists • Retailer smartphone app
• Retailer or manufacturer • Scannable QR codes
email • Text alerts from a retailer
• Retailer website • Use of a smartphone in a
• Twitter physical store

comScore asked consumers to rate a wide variety of shopping tools, including “traditional” tools such as newspapers and TV, as well as digital and mobile shopping
tools

© Shopping 2020 13
And we all want the one to one communication
with the single Customer

© Shopping 2020 14
HOW DO CONSUMERS VALUE
ONLINE SHOPPING TODAY?
A client satisfaction survey on what customers value when shopping online

© Shopping 2020 15
Overall satisfaction with online shopping is high. Shoppers are
least satisfied with flexibility of shipping and returns.
Overall Sat
Satisfaction with Aspects of Online Shopping Experiences Top 2 Box
7 pt. Scale – Top 2 Box
- 86% -
Ease of checkout 83%
Variety of brands/products “I am very satisfied with my online shopping 82%
experiences. … All of the items were in stock and
Online tracking ability shipping was either free or really low.”
79%
Free/discounted shipping 74%
Number of shipping options… 74%
Ability to create an account 74%
Clear returns policy 70%
Ease of making returns… 65%
Availability of live customer… 61%
Flexibility to choose delivery date 58%
Flexibility to re-route packages 57%

Base= Total Respondents (n=3,128) Q10. How satisfied are you with your previous online purchasing
© Shopping 2020 16 as
experiences overall? /Q11.How satisfied are you with each of the following aspects of online purchasing
they relate to your previous experiences?
Online shoppers’ overall experience is enhanced by availability
of free shipping and knowing when their order will be delivered
Factors Influencing Total Purchasing Experience
Average # of Chips Allocated out of 100
Free shipping on most items 7
7
Knowing what day my purchase will be
delivered
8 37
Easy to understand returns process

Availability of express shipping choices 10

Offers environmentally-responsible products

Ability to select a 2-hour delivery window 14

18
Ability to re-route packages to an alternate
location while in transit

Base= Total Respondents (n=3,128 Q29. Thinking of factors that would influence your total purchasing experience with a
retailer, how influential is each of the following factors? Please distribute 100 points across these factors, allocating more
© Shopping 2020 17
points to factors that are more influential and fewer points to factors that are less influential. Please only consider these
factors for the moment.
A quadrant analysis reveals that ease of making
returns/exchanges is more important than free shipping
Quadrant Analysis
Higher Importance/ Lower Satisfaction Higher Importance/ Higher Satisfaction
0,30

0,25
Ease of checkout
Derived Importance Weight

0,20
Ability to create an
account to store
0,15 purchase history and Variety of brands and
Ease of making personal information products offered
returns/exchanges
0,10

Clear and easy to The ability to track

0,05 understand returns online purchases after
policy they ship
Availability of free or
0,00 discounted shipping

-0,05
Flexibility to re-route
packages
-0,10
50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

Lower Importance/ Lower Satisfaction Lower Importance/ Higher Satisfaction

% Top 2 Box Satisfaction Rating

© Shopping 2020 18
Online shoppers want to see their favorite retailers improve by
offering free/discounted shipping and easy returns/exchanges

Wanted Aspects to See Improved by Retailer

Free/ discounted shipping 34%

58%
Variety of brands/products 10%
38%
Ease of returns /exchanges 10%
42%
Availability of live customer… 9%
36%
Online tracking ability 8%
38%
Ease of checkout 8%
34%
Clear returns policy 6%
33%
Flexibility of delivery options 4%
29%
A carbon neutral shipping option 4%
23%
Ability to create an account 4% Primary
26%
Number of shipping options 3% All
28%

Base= Total Respondents (n=3,128)- Q13. Thinking about these aspects of the
© Shopping 2020 shopping experience, which of the following would you like to see improved 19by your
favorite retailer? Please select all that apply and the primary aspect.
Next to free shipping availability, timely arrival of shipments
would most often encourage shoppers to recommend retailers
Recommendation of Online Retailers
- Top 4 Factors -
Would Lead to Recommendation
68% “I have told family friends numerous Has Led to Recommendation
65%
times about free shipping offers.”

43% 41%
37%
29% 31%
28%

Free shipping Receiving my product Free returns Easy returns

when expected and exchanges

Base= Total Respondents (n=3,128) - Q16. Assuming you are happy with the product you purchased, what service
© Shopping 2020 features are most likely to make you recommend an online retailer? Please select up to four options. / Q17. Assuming
20
you are happy with the product you purchased, what service features have actually led you to recommend an online
retailer? Select all that apply.
Shipping costs and products arriving damaged are among the
top complaints leading to recommendations

Reasons that Would Lead to A Negative Recommendation of the Retailer

32%
Shipping costs were too high
66%

16%
Products arrived damaged
49%
“If I had [a] really bad experience with a
site, I will share with my close family
and friends to warn them. It could
I could not get a refund, only 11%
be anything from a delayed shipment,
credit 44% or broken items, refunds not given or I
have to pay for return shipping.”

Could not find a customer 9%

service Primary
phone number 39%
All

Base= Total Respondents (n=3,128) - Q19. What experiences (not including price or the product itself) would most
© Shopping 2020 21
likely lead to a negative recommendation to friends/family? Please select all reasons that may lead to a negative
recommendation and indicate the top reason.
DATA IS AN ESSENTIAL INGREDIENT
TO RETAIL SUCCESS
Where are we today

© Shopping 2020 22
Data availability grows: Opportunities are out there

Retailers have the opportunity to collect data

across almost every interaction both in structured
and unstructured formats.

• Social data
• Location data
• PoS data
• Mobile data
• Advertising data
• Machine data
• And many, many more

© Shopping 2020 23
Data absorption is challenged:
Companies are challenged in turning data into value
The availability of data grows with great velocity. The ability to turn data into one-to-one
customer value is growing at a much smaller pace.

Data available

Potential
Data absorbed Value

The growing gap between available data and absorbed data (source: Day et al. (2009))

© Shopping 2020 24
Retail organizations who intelligently use (client) data

When talking to mature data-driven companies we often see similar indicators and characteristics

• They built and innovate their business model on data vs. collecting data on the business
performance
• They make data driven decisions vs. making a decision and collecting data to support the decision
• There is a data driven culture vs. a culture where data is for geeks and analysts
• They demonstrate a higher data collection and data absorption rate
• They employ a data scientist or senior manager for data
• They have measurable and actionable KPIs across the entire organization
• They treat data as an asset

• They are usually outperforming their competitors

© Shopping 2020 25
How do organizations use client data at the moment
and how do they not use it
“Companies often focus on how to make use of data for better operational decisions and
higher operational performance, generating short term competitive advantage at most and
not long term uniqueness. In the end, performance data ends up to be another competing
instrument as price and service instead of the real customer value you should be looking for”.

Guido Fambach

Use data for Use data less for

• Collect data in the execution of business • To design new business models
practice • To reduce cost of cross border expansion
• To target and optimize campaigns • To develop and improve products
• To improve the website/apps • To create new services
• To improve sales processes • To treat N as 1
• Report data to proof success in execution
• To segment customer profiles
• To measure success of individual elements of
the retail process

© Shopping 2020 26
LESSONS LEARNED
When implementing data in our day-to-day retail business

© Shopping 2020 27
In-effective campaigns because of data quality
Cookie-based demo targeting limits a campaign’s ability to selectively reach a
targeted audience
Target for this health & well being product was
females age 35-54
% Composition of Exposed Audience

Male 40% of exposed consumers outside of planned gender target

40%

20,6% 15-24

22,4% 25-34

Female 25,3% Only 43% of females

35-44
60% exposed to the campaign
met the targeted age
17,3%
45-54 group
14,4% 55+

Only 25% of all exposed consumers met planned targeting criteria

© Shopping 2020 28
28Guido Fambach, comScore
Source:
Low revenue because of aggregated reporting

Simpsons paradox
A marketer tried to repeat a successful sales campaign for
watches. As he wants to leverage previous success, he
creates a report on the previous campaign to understand
which clients to target with success. He finds out that last
year, the campaign drove more successful conversion on
males than females; 30% of male clients but only 21.3% of
female clients bought.

As he wants to invest in fast value, he targets males. The

ROI on the campaign turned out to be low. What Male Female
happened?

The answer was in the figures again, this time broken up by

customer value.
Female
The company sells two types of watches, Swatch and Rolex.
The Swatch got 36% of male clients and 46% of female
clients. The Rolex got 10% of male clients and 16% of Male
female clients.

So if you look at the figures by product, if anything there

was bias in favor of targeting women as they would have
brought more value.
Swatch Rolex

Source: Guido Fambach, comScore

© Shopping 2020 29
Inability to create a causal connection

Without identifier it is difficult to connect data sets

An analyst is trying to understand how changes to the website influence the reduction of churn. As
the data sits in two different systems and there is no common identifier, it is impossible to create a
causal relation. The best the analyst can do is to correlate the data points such as changes on the
website vs. drop in returns in the next 3 weeks.

Recommended solutions
Connect data systems to each other: web analytics, logistics and CRM with one identifier. This will
give 360 degrees insight.

Source: Jaap van Oort, LBI

© Shopping 2020 30
Missed opportunity because of a fragmented
approach to data

When information is collected in silos one risks to miss opportunities, even when the
department performance is great. One risks to deal with the same customer in many different
ways. Another risk is that one does not get to the root cause of the problem.

Source: Guido Fambach, comScore

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BEST PRACTICES
Examples of retailers driving success with data

© Shopping 2020 32
Best Practices – Large International Retailer

Project Success Project Metrics Factors that supported

success

Optimizing customer • Customer journey details • Granular reporting and

journeys and improving • Influence of sales tools on sales segmentation on big data
product targeting. process and on specific target volumes
segments • Customer customizations
• Multiple orientation, selection, and product enhancements
transaction, delivery and customer • Data are analyzed and
care reports. relevant data is fed to a
recommendation engine
• Increased sales from
customer personalization

Source: Coralie Pluimgraaff, comScore

© Shopping 2020 33
Best Practices – Large International Retailer
Other notable project successes

Project Success Factors that supported success

1) Integration of multiple, disparate data sets Knowledge, architecture and external support
from various platforms supporting multi-
channel client journeys
2) Scaling, handling big volumes of cross-domain
data and multiple users to support big data
initiatives including recommendation engines
and customized user experiences
3) Flexibility and lower cost using data subsets

© Shopping 2020 34
 Best Practices: Netflix
Where did data play a role in successful value creation?

Netflix, the online video service that just entered the Dutch market, tracks viewing habits of its 33 million
users through its tagging and recommendation system. Data stored includes when you pause, rewind and
fast forward, ratings, searches, time of day when shows are watched and on what devices, tags
(annotations by users to describe the talent, the action, the tone and the genre, among other things).

Recently, it used this data to develop its own series (“House of Cards”), a first for an online video service.
Based on its data on viewer’s preferences, it anticipated the combination of the star (Kevin Spacey),
director (David Flincher) and topic (political drama) would be a success. During the launch of the series,
trailers to its subscribers were personalized: fans of Mr. Spacey saw trailers featuring him, women watching
“Thelma and Louise” saw trailers featuring the show’s female characters and serious film lovers saw trailers
that reflected Mr. Fincher’s involvement.

Why the best practice was used:

Cinema and TV is traditionally a high-risk trial-and-error business. Using data on viewers’ preferences allows
Netflix to anticipate the likelihood of success of new series, and open the door the a new revenue stream
(content licensing)

Source: Bart-Jan Sweers, PWC

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Best Practices: Netflix
Notable project success
Project Success Project Metrics Factors that
supported success

Number of streaming House of Cards is the most streamed piece of The use of data on
downloads content in US and 40 other countries customer preferences in
Netflix accounts for 33% of peak streaming the product development
downloads. and portfolio
management phases.

Number of subscribers Netflix signed up more than 2 million new U.S.

subscribers in 1Q2013, at the top end of the
company's own predictions. The first quarter
included the launch of "House of Cards“.

Shareholder value The strong subscriber gains caused Netflix shares

to rise by 22% in morning trading following the
company's earnings announcement. Shares are
up more than 160% year to date.

© Shopping 2020 36
Best Practices: Netflix
Other notable project success

Project Success Factors that supported success

Cross-selling via recommendation engine The use of data on customer preferences in the
sales process

Description of process experience using the Best Practice:

Netflix gathers real-time data about the programmes its customers were watching, their demographics
and viewing patterns, and builds up a picture of the kind of content that would be well received.
Netflix makes use of Amazon’s in-the-cloud data analytics service.

Data analytics on viewers behaviour to predict preferences allowed Netflix to:

a) increase usage,
b) win new subscribers,
c) open de door to new revenue stream, resulting in increased shareholder value.

© Shopping 2020 37
Best Practices – Retailer, Minimizing credit risks leads to
profit, customer insights and new business

As a retailer experienced fraud, a team was created to reduce this. At first was analyzed in which zip
areas the fraud mostly occurred. Then, before delivering goods to these zip areas, pre-payment was
asked. The team became very successful in predicting where problems would occur and started
registering other consumer characteristics as well:

▪ In which areas consumers have gardens

▪ Sport clubs membership
▪ Income
▪ Etc.

The information was used to send folders/mail to the consumers who answered to selected
specifications. Nowadays this is sold as analytics software and is used for:

▪ Protecting assets with tools and insights to prevent fraud

▪ Maintaining extensive credit databases to limit loss and minimize credit risk
▪ Delivering data, insight and analytics to target new customers
▪ Developing customer management strategies to increase revenue opportunities
▪ Consumer insight

Source: Janet Gerrits, Euretco

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Best Practices: Example of customer mapping

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THE ROAD TO 2020
Set a direction, embark on the journey with data as the fuel

© Shopping 2020 40
Success through data

Dutch retailers can be more successful, both national and international and drive more value for
customers by using data beyond their every day operational decisions. By taking evidence based
tactical and strategically decisions, retailers can differentiate themselves and create better
propositions that can be delivered faster and therefore create competitive advantage. The Customer
Data Value Management group has built a practical maturity model to inspire retailers on this road to
value.

© Shopping 2020 41
Three stages of maturity described
From data to big data to smart data
Initiate
Fragmented data with a high degree of data effluence and inaccuracy with limited access to people
requires the retailer to spend the majority of time on data collection and cleansing. Analytics is
focused on what happened before; where some of these questions are answered ad hoc and only
some of the time. There might be a successful use of data in isolated pockets within the organization,
but overall, the organization is fragmented and misses out on opportunities.

Accelerate
Data sharing problems across the company begin to fade and the availability of clean and complete
customer focused data increases. Standards are developed and common tools further increase the
data quality allowing the total effort to focus on analyzing data. Within this stage of maturity, most of
the customer value questions are answered in near real-time and can be used to impact the current
proposition. The retailer is seeing the first serious business value coming from data. The data volume
grows and becomes big and therefore requires data governance and IT solutions.

Innovate
Efforts are focused on predictive analytics and innovation. Real-time decisions are widespread due to
the high trust and confidence with the data being used. Strategy is designed and improved on data.
Data is core to customer value success and there is a clear link between data usage and incremental
growth. Propositions are targeted to the individual on the fly, while the products can be sourced in
time from everywhere. The retailer innovates and transforms to new valuable business models that
create value beyond the transaction to both the customer and the retailer.

© Shopping 2020 42
Maturity inspiration model
High Value

Strategic
Enterprise Actionable
Data driven intelligence
Business Value business modeling At the heart of
Consolidation of Data-driven value innovation,
analyses can be forecasted transformation
Scale Ability to absorb Link between data and customer
Analytics tools in data increases usage and value strategy
place First serious improved customer
Growing demand for business value from value
Emerging data data More data sources
More data collected and data absorbed
Individual profit
Data in silos Governance and
Emerging interest standardization in
for data development
Fragmented
Ad hoc
analyses
Limited value
Fragmented
approach
Low value

Initiate Accelerate Innovate

Looking back with Near-real-time Predictive analytics
fragmented data customer value answers and innovation

Low CDVM maturity High CDVM maturity

© Shopping 2020 43
Maturity assessment
Data
6
5
4
3
Culture 2 Governance
1
Goal
0
Actual

Expertise Investment

© Shopping 2020 44
Data assessment

1. We have high quality data that is complete, clean and can be trusted.
2. We collect the right data to answer to strategic customer value questions
3. We have standardized our data to support comparisons across business units
4. We have standardized our data to support comparisons with the market place
5. We make data accessible to those who need it, when they need it, where they need it
6. We collect data for a purpose; every piece of information stored is important to customer value
7. The data accurately represents reality or a verifiable source. Data is objective, unbiased and
impartial, it does not depend on the judgment, interpretation, or evaluation of people
8. Reports are in the right format and show the right data to inform customer centric decisions
9. We can create a unique customer view out of the data
10. Based on the data, we know what customers value, know how to deliver the value better than
the competition and based on the data we can communicate with our customers in such a way that
they feel the true value is delivered

© Shopping 2020 45
Governance assessment

1. We protect the use of data for analytics through robust information security measures
2. Access to companywide and individual data is specified in our rights and privileges policies
3. We have set security and privacy procedures for expanding data collection for the use of analytics
4. We are transparent to our customers on data collection and usage
5. We have business units and/or individuals who protect their data from wider usage
6. We have a senior manager or data scientist to lead the use of analytics for business purposes
7. We have a process from moving from what the data say to making changes/decisions
8. We have a process for eliminating, phasing out, fixing errors or updating data that are no longer
used or of value
9. Our data, reports, and processes are scalable; we don’t have to reinvent the wheel each time to
address questions and problems that come up regularly across business units
10. We regularly audit and improve our data and analytics policies and procedures

© Shopping 2020 46
Investment assessment

1. We allocate enough budget to data to generate business value out of data analytics
2.We see the cost of data and analytics as a strategic company investment, rather than an
operational cost/ expense
3. We have hired an apt number of data analysts to address business and strategic initiatives
4. We invest in regular analytics training
5. We have sufficient capacity to store, manage, and analyze increasingly large volumes of structured
and unstructured data from different sources
6. We have the right tools/software for analytics
7. The company rewards people with bonuses for using data in day-to-day business
8. We have made data investment decisions using financial criterions such as indices of profitability
and payback
9. We continuously measure financial performance of data driven decisions
10. We have a long-term investment view for data

© Shopping 2020 47
Expertise assessment

1. We have a fitting number of professionals to support the use of data

2. We have dedicated professionals who have been trained in using data
3. Everyone in the company can work with the available analytics tools
4. We have business professionals who know how to apply analytics to their business
5. We have analysts that know how to present data findings to stakeholders and to the broader team
in a way that is understandable and visually intuitive
6. We have sufficient data mining capabilities in our company
7. We have the ability to bring different data sets together for a 360 view of our customers
8. We have regular training sessions and knowledge sharing across the company
9. We have regular training sessions and knowledge sharing with external consultants/ other
companies
10. Expertise in the company on data and analytics is accessible at all times

© Shopping 2020 48
Culture assessment

1. We have set a clear direction for the company

2. Our senior leaders are openly committed to the use of analytics and data-driven decision-making
3. We have assigned an owner to customer value data analytics
4. Everyone in the company largely accept the use of data and analytics to make decisions
5. We allow people to make mistakes and learn from these when using data
6. We have a culture that puts data at the heart of transformation and innovation
7. We have identified the key outcomes we are trying to improve with better use of data
8. Use of data is part of our strategic customer focused plan
9. Data driven decision making is seen as professional behavior rather than something for
technology people only
10. We have demonstrated with at least one high-profile success that data analytics leads to
improved outcomes of customer value

© Shopping 2020 49
Interpreting your score

1. Fragmented | 2. Emerging | 3. Scale | 4. Business Value | 5. Enterprise | 6. Strategy

Undeveloped Mature

1 2 3 4 5 6

© Shopping 2020 50
Data quality tips

1. Make someone responsible for data quality

2. Define the purpose for data
3. When launching a new activity that involves customer contact i.e. a proposition, campaign; make
data collection a component of the activity
4. Create a consistent naming convention for data and reporting
5. Use comparable and actionable KPIs across the company
6. Collect the data across all touch points with a consistent customer centric purpose
7. Perform regular audits to ensure the data is objective and unbiased and to avoid the data is
skewed to what people “like to see”
8. Perform regular data cleansing activities through real customer test cases across business units
9. Perform regular data completeness activities through real customer test cases across business
units
10. Once the data is considered to be clean, stay on top of it and keep it clean

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Governance tips

1. Make someone responsible for data management

2. Establish a team of data people across the company that have a dotted line to the chief data
management, such as data stewards or customer value ambassadors
3. Establish a security process. Large companies could think of ISO27001
4. Embed data usage in the competency of all staff
5. Establish a data user admin policy to secure customer data privacy
6. Reward people for sharing shareable data across business units
7. Establish a working process to improve data quality that includes fixing the issue and preventing
an issue from happening again.
8. Use policies and systems that are bigger than what you need today as you will need these
tomorrow
9. Regularly “stress-test” your policies and procedures to stay ahead of the curve
10. Establish a measurement framework to measure progress of data analytics and customer value

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Investment tips

1. Success is often aligned with the investment you put into it. An investment is done in something
that is important to success. So make data important to success.
2. Free up budget to allow for a serious project
3. Continuously measure the financial performance of your customer data value project
4. Invest in data professionals and expertise
5. Invest in continuous training and coaching
6. Treat your data project as an investment project and test the model against growth
7. Talk ROI and payback time instead of operational cost
8. Reward people for applying data to their everyday practices and decisions
9. Invest in tools that can handle structured and unstructured data and that provide the flexibility
to adjust to your evolving business needs
10. Invest in data handling and storage capacity

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Expertise tips

1. Ensure your people have the knowledge to turn data into value
2. Ensure there are enough people in the company that are trained in day-to-day analytics
3. Ensure you get data mining capabilities on board when you want to accelerate
4. Ensure your data professionals are able to present data to non-experts
5. Stimulate people to be creative and to test hypotheses on the available data
6. Share lessons learned and share best practices across the company to why data makes a
difference
7. Have regular sessions with external experts or people within your network; sharing is multiplying
8. Make expertise available at all times to the people that need it, when they need it
9. Make it sexy to be smart, so more people want to become an expert
10. Make analytics part of the must have skill set for new hires

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Culture tips

1. Set a visionary direction or clearly define what winning looks like

2. Set ambitious yet attainable milestones that connect back to the vision
3. Commit as a senior leader to the use of data and analytics
4. Make analytics a skill set that is in all your hiring profiles
5. Develop an ownership mentality where people are accountable for how they use data
6. Set instant rewards for people for the business results they got from using data
7. Take the time to celebrate and to promote early successes
8. Find senior sponsors within the company that want to become your storytellers; stories to
motivate their employees to achieve more than they thought possible
9. Use data in all communication and in line with the direction you set out
10. Plan your culture, monitor it and manage it so that it remains aligned with what you want to
achieve

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THE MATURITY MODEL IN PRACTICE
Three retailers tested the model

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Maturity assessment for a brick and mortar retailer
moving into digital
Data
6
5
4
3
Culture 2 Governance
1
Goal
0
Actual

Expertise Investment

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Maturity assessment for a small retailer
Data
6
5
4
3
Culture 2 Governance
1
Goal
0
Actual

Expertise Investment

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Maturity assessment of a large multi-national retailer
Data
6
5
4
3
Culture 2 Governance
1
Goal
0
Actual

Expertise Investment

© Shopping 2020 59
Conclusion
There are several driving forces behind the rising imperative to use analytics. We live in a connected world where borders disappear,
technology thrives, companies compete in highly dynamical arenas often multiple at the same time. They sell multiple products with
multiple lifecycles, to multiple consumers, in multiple countries under multiple legislations and multiple currencies, sourcing multiple
suppliers across the globe.

The rise of social media and mobile compounds the situation. Customers are more demanding in their real-time quest of individual
products and services that fit their specific needs and at the same time use the force of groups to bring down pricing.

Company size, scalability, price, quality and even service are becoming a less competitive edge then before. To beat the competition,
firms now look into ways to be flexible and highly adoptive in a dynamic context, facilitating the differentiated customer needs and
using a granular and flexible force of cost effective and specialist suppliers.

To manage, improve and target all the elements in such an adoptive customer value strategy, managers need analytics more and more.
Analytics is the systematic collection and use of data, statistical and quantitative analyses and predictive and prescriptive modeling in
order to perform analyses and support better evidence based decisions.

In this environment, firms collect an increasing amount of data available from various sources. It may come real-time from customer
loyalty card programs, web site sessions, mobile sessions, point-of-sale statistics, supplier information systems, internal and external
digital sources and many other sources.

However current analytics systems are generally not aligned with their organizational, cultural and environmental conditions. As a
result, many opportunities to create value for (individual) customers are underutilized. Intelligence is used to support or improve the
performance of existing policies and practices rather than to create real sustainable competitive advantages or even new business
models.

All this suggests that in a changing business environment in which we operate, strategy and management approaches need to change.
The CDVM group believes that customer data and customer analytics will be the fuel to this change and the right direction for success.

On behalf of the Customer Data Value Management group, Guido Fambach

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ABOUT SHOPPING2020
How do consumer shop in 2020?

© Shopping 2020 61
About the Shopping 2020 research program
How do consumers shop in 2020?

Shopping 2020 is a research program whose goal it is to answer the following central question:

“How do consumers shop online in 2020 and which actions need to be undertaken on an
national, sector and company level upon that Dutch B2C selling companies can act on this
successfully, nationally, within Europe and globally.”

The motive for this research program is that the current retail, finance and travel
landscape is changing rapidly and despite the current economic crisis, companies
have to reposition themselves in order to survive beyond 2020:

• Changing consumer behavior (from single- to omni-channel);

• Disintermediation of the value chain (producers sell direct);
• Rise of new media (Google glasses, voice/virtual recognition)
• Product digitalization (gaming, 3D printing);
• Internationalization and global hyper competition (Amazon, Wallmart);
• etcetera…

Many of the developments are universal and reach across multiple

Industries and sectors.

Source: http://www.zazzle.nl/nederland_de_nederlandse_macht_van_het_honkbal_van_tas-149333394796361450

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19 key themes were defined to create a Shopping2020 Vision & Actionplan
In each expert group experts from the scientific, political and business community are participating

Future Trends

Shopper Cross border Future

Technological Ecology Political / Legal
Behaviour (e)Commerce Touchpoints

Customer Journey Key Themes

Business Omnichannel
Orientation Selection Shopping2020 Models Organization
Vision

Action Plan Security & The New

Transaction Delivery
Shopping2020 Fraud Shopping Street

Customer Travel Retail

Customer Care Data Value Smarter
Action plan Action plan Supply Chain
shopping
Management

Finance … Online
Action plan Action plan Entrepreneur- …
ship

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In total more than 460 experts are working for half a year on Shopping2020

© Shopping 2020 64
Shopping2020 has been made possible by a large community
Of Founding Partners, Hosts, Industry Organizations, Knowledge, Network & Media Partners
Ed Nijpels (voorzitter) Cor Molenaar (Erasmus Universiteit) Giovanni Colauto (CEO Bijenkorf) Herna Verhagen (CEO PostNL)
Bernard Wientjes (VNO-NCW) Kitty Koelemeijer (Universiteit Nyenrode) Harry Bruijniks (CEO Euretco) Nick Jue (CEO ING NL)
Commissie van
Arie van Bellen (Directeur ECP) Walther Ploos van Amstel (VU) Ronald van Zetten (CEO Hema) Michiel Buitelaar (COO Sanoma Media)
Aanbeveling
Martijn van Dam (kamerlid PvdA) Erik Fledderus (Directeur TNO) Joost Romeijn (CEO Sundio Group) Danny van der Eijk (Chairman Achmea)
Jan Kees de Jager (vml. Min. Fin.) Heleen van Oord (Directeur DQ&A) Paul Nijhof (vml. CEO Wehkamp) Harry van Dorenmalen (CEO IBM Europe)
Annemarie van Gaal (CEO van Gaal)

Program
Board

Program mgt: Jorij Abraham

Support
Mar/Com: Inge Demoed
Team
Research: Eveline Poerink
Congres: Marin Wiellersen
Travel Retail Finance

Expertgroep Expertgroep Expertgroep Expertgroep

Future Expertgroep Future Expertgroep
Shopper Cross Border Politiek /
Trends Behaviour Technologisch Touchpoints Ecologisch
(e)Commerce Juridisch
Dymfke Kuijpers … … … … … …

Expertgroep Expertgroep Expertgroep Expertgroep Smarter

Key Themes Expertgroep Expertgroep
Online Business Omnichannel De Nieuwe Shoppi
Veiligheid / Fraude Supply Chain
ondernemen models Organisatie Winkelstraat
Axel Groothuis … …
…
… … … ng

Expertgroep
Expertgroep Expertgroep Expertgroep Expertgroep Expertgroep Customer data
Customer
Orientation Selection Transaction Delivery Customer value
Journey
Care management
Arjen Bonsing … … … … … …

Founding Partners: Kennis partners: Wetenschappelijke partners: Netwerk partners: Media partners:

© Shopping 2020 65
More information can be found at www.shopping2020.nl
Here you can find all (intermediate) reports of all expert groups

Visiting address:
Horaplantsoen 20
6717 LT Ede

Postal address:
Postbus 7001
6710 CB EDE

Phone: +31 318 64 85 75

Email: [email protected]

© Shopping 2020 66