dunnhumby presentation at the 2013 CRMC conference in Chicago, IL.

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Power to the People
A New Model for
Customer-First CRM
June, 2013

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● Driving forces behind Raley’s
● Raley’s no longer a conventional grocery chain
● Raley’s has a loyalty approach, not just a card
program
● Rules that build customer engagement
● Innovations in advocacy
● Customer data driving the business
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Rules changing at an aggressive pace
● Customers’ and their needs
● Buying decisions
● Retail options
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The competitive landscape is changing rapidly
– especially in California
New threats from
old competitors in
existing
channels…
New threats from new
competitors in new
channels…
Suppliers selling
direct to
consumers…
Competitors leveraging
new models…
Growth of clubs…
Saturation of grocery…
LOW END
HIGH END

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“Raley's makes our customers' lives easier and
better by delivering a personalized food
shopping experience.”
Mission Statement
“We build lasting relationships with our customers by
anticipating their needs and exceeding their
expectations.”
Our Core Values

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Traditional product centric
Customers treated the
same
Mass marketing
One size fits all
Risk averse
We can do it ourselves
Customer centric
Managing change &
engaging the organization
New talent to deliver
Technology
Strategic partners
From To
Raley’s transformation is centered around
personalizing the customer experience

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Transactional/
functional
Emotional
engagement
Did I get
what I want?
How did that
make me
feel?
How do I feel
about this
retailer?
Taking meaningful steps to emotionally engage our
customers

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The Raley’s and dunnhumby partnership was initiated
through common beliefs
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Best-in-Class
Proven Results
A-Team on site
Global Learning
Culture
Flexibility
Speed
Test & Learn
Values Alignment
Outrageous Thinking
Future thinking
Innovation
Passion
Vision

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Raley’s wanted to reward and retain our best
customers but knew a loyalty program alone wasn’t
the answer
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A loyalty card is the business enabler for insight,
improved customer and employee engagement
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direct
communication
more effective
mass media
customer-
based
decision tools
test & Learn
smarter
pricing
rewards
(loyalty
program)
customer-led
assortment
more efficient
promotions
staff
motivation
change ways
of working
getting the
store / brand
right
getting
comms right
getting the right
processes right
organic growth
base sales
direct
communication
more effective
mass media
customer-
based
decision tools
test & Learn
smarter
pricing
rewards
(loyalty
program)
customer-led
assortment
more efficient
promotions
staff
motivation
change ways
of working
getting the
store / brand
right
getting
comms right
getting the right
processes right
organic growth
base sales
A ‘loyalty approach’ creates the breakthrough value
retailers are looking for

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…rewards you for being you.
Launched Aug 2012
700,000 active customers
Points based program
Digital bias with paper variations
Load to card

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Something Extra provides members with five overt
key benefits
● Personalized Offers
● Extra Points
● Rewards
● Inspired Ideas
● Extra Surprises
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Our approach combines loyalty and advocacy to
deliver on our promise to give customers ‘Something
Extra’
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Increase LOYALTY of
Raley’s Best Customers
Cultivate ADVOCACY for
Raley’s and our Suppliers
both online and offline

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Executing a predominately digital program means we
have to be relevant to cut through the clutter
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We are all bombarded by…
1. Other grocers!
2. National retailers
3. Specialty retailers
4. Local retailers
5. Travel sites
6. Service providers
7. Financial services
8. Entertainment
9. Magazines
10. News articles
11. Google alerts
12. Bill collectors
13. Social media sites
14. Personal emails
15. etc…
16. etc…

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The key to cutting through the clutter is consistent
quality, not quantity
The key to quality is RELEVANCE
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We ARE incentivizing our customers to
shop with us every trip
Rewards
Extra Points

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Email provides a base communication to reach our
most engaged customers
● Initial emails designed to:
– on-board shopper into the program
– experience the benefits quickly
● Shoppers receive a consistent flow of
offers based on their visit pattern
● Limited number of offers to increase
relevancy
● Offers based on items customers are
buying already
● Takes customers to Raleys.com where
additional offers & information can be
found

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The Quarterly Rewards Statement is the flagship of
Something Extra
● 1% reward for every customer
collecting 500 or more in a
quarter
● 95% of coupon combinations
are unique
● Limited number of offers to
increase relevancy
● Offers based on items
customers are buying already
● Paper and digital versions
based on preference

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Success is coming by doing the hard work to make it
easier for the customer
● >60% sales on Something Extra
● 75% of all members participated in the Rewards Statement or Email
● Open rates up to 65%
● Up to $7 Sales to Cost
● Average 32% coupon redemption
● Over 1200 coupons available
● 500 attendees at vendor summits
● Reporting available to all participating vendors

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“What I love are the coupons for items
that are usually on every shopping list,
like coffee and yogurt. My brands and
my packs. Raley’s is paying attention to
me.”
Myrle Pardedd

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“Wow! I just received my first “Extra
Rewards.” Six coupons, all of which I can
use plus a $5.00 credit. I am impressed!”
Richard Charles Paul

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Something Extra
Try-It is the
platform which
allows us to
cultivate advocacy
at Raley’s

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There are four basic steps to every Try-it program
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MEASURE
Advocacy impact across
key metrics
ENGAGE
Exclusive Raley’s
Experiences
TARGET
Loyal shoppers invited to
participate based on
shopper data, profile
surveys & influence
ACTIVATE
Participants spread WOM
and share digital content

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60% of sales come from our loyal customers (20%),
yet we are just capturing 60% of their share of wallet
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Addressing price perception where it matters most
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● Recognition that all customers are
sensitive to price
● Tailor the store to reflect its
customers
● Which customers respond to
stimuli
● Tactics to drive sales where
opportunities exist

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Driving efficiency in promotions
● Stop negative-lift promotions
● Actions to improve revenue
– Adjust discount depth
– Try different promotion type
– Stop promoting
– Shift to 1:1 targeted communications
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Improve assortment decisions and get insights on
merchants’ desktops
● Product assortment optimization
– Protecting SKUs loyal customers buy and
removing inefficient ones
● Differentiated store assortment
based on customer needs
● Space planning
– Layout and adjacencies
– Navigation

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Improved collaboration with vendors with a collective
focus on the shopper
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dunnhumby
ManufacturerRaley’s
 Improved Sales
 Improved
Communication
 Improved
Relationships
 Simplified
Collaboration

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So, do you have a Loyalty
Program or Loyalty Approach?