June 18, 2014

Online / Retail Dynamics: Store Distance

A quick note for you today ...

Store Distance plays a major role in how customers "convert", and in how customers use your online channel.

In most of my projects, there are three key store-distance bands.

  1. 0-5 Miles:  Here, customers frequently use the website to plan an in-store purchase. Conversions are hard to come by, via traditional metrics, and yet, the website has never been more important. Email, by the way, becomes a major in-store driver in this case.
  2. 6-25 Miles:  This band is driven by online research that yields a 50/50 mix of online purchases and in-store purchases. This is the classic "omnichannel" customer that you read about. These customers frequently "do everything". Email is a tool that often drives the customer online, in this mileage band.
  3. 26+ Miles:  Even more interesting is the 100+ mile band from a store. Here, the catalog plays a major role in relationship building. These customers tend to buy online after receiving catalogs, at rates higher than for any other segment.
Plug store distance into your segmentation strategy, and then carefully analyze the merchandise customers purchase, the advertising channels the customers purchase from, and the in-store / online mix by mileage band. You're going to find many unique segments that can be actively mined for increased profit.

Contact me (kevinh@minethatdata.com) for your own, customized project.