How Canadian Tire Is Turning Customer Data and Personalization Efforts into ROI
Canadian Tire’s Q3 2019 Achievements
- In Q3, Canadian Tire had 100 million visits to canadiantire.ca/ alone, making it one of the most visited retail sites in Canada.
- It achieved a milestone of CAD500 million in annual e-commerce sales across its banners.
- It relaunched its CTR mobile app in the quarter with enhanced search and functionality for automotive customers and now has over 500,000 monthly visits.
- At SportChek, the retailer rolled out mobile point-of-sale in 60 stores with the plan to expand to the entire network by Black Friday. This is enabling associates to check out customers anywhere in the store decreasing wait times and enhancing their experience.
- It has been testing free shipping at SportChek for Triangle Mastercard members and has seen encouraging results, including an increase in the number of transactions made with its credit cards and more SportChek customers applying for Triangle Mastercards online.
Canadian Tire’s Triangle Rewards program is providing the retailer with a single view of its customers, which in turn is giving it the ability to engage them in a much more personalized way.
The retailer showed strong results from its digital investments in its third quarter 2019, including the fact that its Triangle Rewards program now boasts nine million active loyalty members, or close to 70% penetration of Canadian households. Now it’s regularly engaging those members through 5 million weekly email and app communications, according to EVP, Retail, Allan MacDonald.
Canadian Tire has started to segment the data it has from its loyalty program so the retailer can better understand “who that customer is,” said senior VP, Marketing, Susan O'Brein.
“We've been working with all of the business unit heads to help them identify who their customers are and using our business tool called CAT, which is a category analysis tool,” she explained on the company’s recent earnings call, “we've been able to help them understand who is buying in the categories they compete in.”
This work is helping them to be able to start to develop better assortments to attract customers, but it’s also helping to personalize communications with shoppers. Regarding the 5 million weekly emails, O'Brein noted that Canadian Tire is seeing “a massive return on those investments.”
According to O'Brein, Canadian Tire sent out 5 million offers to its customers, but held back a percentage of the customer base, so it was able to measure how much return it got on that marketing investment. When the company started the program it was around four to one, meaning if the retailer spent a dollar to make an offer to a customer, it would get $4 in sales back. Now, using the data, the retailer is “developing really strong algorithms to predict what a customer might want,” and is able to make an offer that returns around nine to one, meaning when it invests a dollar to communicate it gets back $9, she explained.
“We're seeing an efficiency that we've never seen before in personalized communications, we doubled it in Q3,” she revealed. “We're also looking from a segmentation perspective at that lifetime value of our customers, which we've never done in the past, and that's going to enable us to, from a marketing perspective, to be able to choose which customer groups are most interesting and profitable to us and then allocate our marketing investment against that."
She continued, “We can now start to figure out which customers are more profitable than others. And so you can just see as time goes by, you start getting far more efficient, plus if it's more personalized and customized for the customer, overall they're going to be more engaged.”
She noted this creates a flywheel effect, meaning, the shopper comes to visit more often because of the personalization, and therefore the retailer gets more data and can make even better offers.
“It's a great flywheel effect you get with using customer data."