This case study highlights how we leveraged retail data analytics and industry expertise to co-create a sustainable customer loyalty program for a leading travel retailer.
As we know…
While traditional brick-and-mortar businesses have given way to e-commerce over the years, duty-free retail has continued to thrive despite the largely offline model.
However, the unique nature of the duty-free retail business means the opportunities for driving active customer engagement and repeat sales entirely depend on the customer’s decision to travel. Thus, a robust retail customer engagement strategy becomes vital for enterprises to build sustainable loyalty.
The challenge for our client, a travel retailer operating duty-free stores, was…
While attracting new members, its tiered, discount-based loyalty program could not drive meaningful customer engagement beyond the first purchase. 90 percent of members purchased only once a year, significantly reducing the potential for brand recall during and after travel.
Moreover, the discount-based model (focused on upfront incentives) eroded margins, with no increase in repeat purchases or soft engagement with members.
Stepping in as a co-creation partner…
The consulting arm of WNS Analytics (our data, analytics and AI practice), implemented a holistic analytics-led
solution. Our consultants deployed loyalty assessment frameworks to assess the client’s existing loyalty program,
perform a comprehensive health check, including behavioral analytics, and re-design the loyalty program.
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The first phase of the engagement involved WNS Analytics leveraging a proprietary framework and extensive data analysis to evaluate the overall health of the existing loyalty program. The team used inferential data analytics and advanced statistical techniques to estimate performance on several metrics, including:
- Customer attrition
- Optimal time-to-market
- Member segmentation
- Behavioral analysis of members versus non-members
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During the second phase, WNS Analytics designed a cashback-based loyalty program. This included developing the loyalty program’s financial model as well as the operating model and the strategy for driving member engagement and monetization opportunities when members were not traveling. While we carefully considered other loyalty constructs, we found the cashback model, driven by an ecosystem of industry-wide and cross-industry partnerships, to be the most effective alternative for the client.
This collaborative engagement led to the client…
Discovering untapped revenue potential to the tune of USD 300 Million. This translated to more than 75 percent revenue growth over the existing program.
The design of the new retail loyalty program enabled the client to:
- Incentivize members to engage during periods when they were not traveling
- Gain a holistic view of members’ demographic and psychographic profiles from their transactions with the partner network
- Leverage a framework of reference on customer behavior to better plan and design campaigns, drive active engagement and monetize the program
- Impact (positively and measurably) a wide range of revenue, cost and customer experience metrics, including:
- Revenue per member and revenue per transaction
- Cost per campaign through campaign optimization and automation, people cost rationalization and incentive cost optimization
- Member satisfaction scores
About WNS Analytics:
WNS is a digital-led business transformation and services company with 60,513 professionals across 64 delivery centers worldwide, including facilities
in 13 countries. WNS combines deep industry knowledge with technology, analytics and process expertise to co-create innovative, digitally led
transformational solutions with over 600 clients across various industries. WNS Analytics is the Data, Analytics and AI practice of WNS that enables
business decision intelligence for clients by combining Artificial Intelligence (AI) and Human Intelligence (HI). We cater to 250+ global companies
including Fortune 100 and Fortune Global 500 organizations. WNS Analytics is a robust practice of 6,500+ Domain, Data, Analytics and AI experts
with proprietary AI-led assets and innovative technologies. We enable businesses to make transformative decisions backed by data-led intelligence,
ensuring differentiated outcomes. WNS Analytics is an end-to-end Consulting-to-Implementation partner delivering business goals for clients with
an integrated ecosystem of co-creation labs, strategic partnerships and outcomes-based engagement models.
To know more, visit https://www.wns.com/capabilities/analytics