Using people + tech to support Toolstation with marketing and loyalty, including segmentation, opportunities analysis and measurement.

The company.

Toolstation is a multi-channel tools and building materials retailer. With branches in the UK, the Netherlands, France and Belgium, Toolstation supplies over 25,000 products to consumers and tradespeople, either online, in store or over the phone.

The challenge.

Optimising marketing and loyalty decisions is a huge opportunity for retailers. Toolstation recognises this and sought to build a better understanding of their customers, including how best to target them and personalise communications. They also wanted to intelligently measure the results of marketing activity and estimate potential sales opportunities.

The solution.

We started by segmenting Toolstation’s active trade and DIY customers based on their spending habits (i.e. loyalty) and the product categories purchased (i.e. behaviour). For example:

• Loyalty segments: frequent high spender, regular low spender and single shopper.
• Behavioural segments: plumber, builder and painter/decorator.

Combining loyalty and behavioural segments meant we could understand the purpose of customers’ shops – such as the nature of the project or trade. We then used the segments to build intelligent audiences for marketing using our AI-powered software, HyperFinity.

Before working with us, Toolstation’s customer segmentation wasn’t set up to predict future spend. We built a ‘size of the prize’ model to estimate potential sales opportunities from marketing activities. For example, the sales impact from retaining highly loyal trade customers or from using targeted offers to encourage frequency and larger basket sizes for less loyal customers.

Finally, we built a sales drivers dashboard so Toolstation can clearly understand changes to their monthly sales and which customers/behaviours have driven these, helping to measure the impact of targeted marketing initiatives.

The results.

Our solution provided Toolstation with an in-depth understanding of their customer and loyalty base. We helped them identify upsell and growth potential, amounting to a £2.8 million revenue opportunity for the following year.

We’re keen to provide retailers with ongoing data science and AI capability – so Toolstation can access our platform to estimate sales opportunities in the future. They also have access to their sales drivers dashboard, to power cyclical marketing decision making.

Toolstation’s Customer, Marketing & Digital Director Chris Other said: “HyperFinity is a game-changer for Toolstation’s marketing and loyalty efforts.

“When choosing an AI partner, we were particularly impressed by HyperFinity’s combination of software and services. Their tech and consultancy teams really understand the issues modern retailers face – and how best to solve them.

“HyperFinity’s work on customer segmentation, business performance drivers and sales opportunities has advanced our commercial decision-making. We’re looking forward to building on these solid foundations as we continue to work together to drive our customer-led proposition.”

What’s next?

We’re continuing to work closely with Toolstation on marketing and loyalty projects. Typically, a project like this can lead onto a range of further activity, including:

• Next best product recommendations, for personalised marketing communications.
• Intelligent targeting for customer loyalty schemes.
• Lapsing customer models.

Ready to find out how decision intelligence can boost your marketing and loyalty efforts? Contact us for a chat.