Loyalty to your taste

How X5 launched loyalty programs

In the store of almost any retail network, the cashier will ask the question "Do you have a store card?" In this post I want to talk about loyalty programs for customers in the stores of our company. X5 operates stores in several retail chains: convenience stores under the Pyaterochka brand, supermarkets under the Perekrestok brand and hypermarkets under the Karusel brand, and we also have the Perekrestok.ru online store. My name is Aleksey, I am an architect on client solutions. I have been working with different loyalties of the company for about 10 years. I want to play the role of a “biographer” and will do a retrospective of the main stages of launching, establishing and developing loyalty programs. I will describe what we can do today, and also try to outline what will happen with the loyalty programs of our retail chains in the near future. So, let's go!







Now each trading network of the company has its own loyalty program:

Perekrestok Club - the loyalty program of the Perekrestok trading network (the Family Club subroutine is also available) https://www.perekrestok.ru/info/club ;

"Carousel" - the loyalty program of the "Carousel" trading network ;

“Help-card” is the Pyaterochka retail chain loyalty program (within the framework of which the Children's Club project was also developed and implemented with additional functionality of special offers, promotions and recommendations for relevant target audiences).



Below I will talk about each program a little more.

Crossroads Loyalty Program

The date of the launch of the first loyalty program can be considered 2006, when the loyalty cards of the Crossroads Club appeared in Perekrestok stores. Obviously, this program is one of the oldest in the field of food retail.



The first loyalty cards looked quite archaic to the modern look.







Moreover, cards in this design can be found not only among collectors, some buyers continue to use them. I, if that, also has one, you know nostalgia ...



Initially, there was an idea to provide cards for all family members, so there were THREE cards in the participant’s package right away. “Main” (you can add and write off points) for the head of the family and two “additional” (only for scoring points) for other family members. Thus, all cards were tied to a general bonus account, they can be presented at the time of purchase to accrue points, but only the holder of the “main” card could write off points to pay for the purchase. If two "additional" cards were not enough, you could order more for free. Also in the package of the participant was a paper form of the questionnaire, which had to be filled out, signed and given to the cashier. Writing off points from the “main card” was allowed only after successful processing of the questionnaire (after activating the card). The processing time of the questionnaire took up to 3 weeks (!), And sometimes the questionnaire was completely lost (human factor) or could not be correctly digitized. All paper profiles were digitized, scans were saved in the client profile, and the paper original was also necessarily saved. Just imagine, these were tons of paper forms with customer profiles! Now the card can be activated online via any channel that you like best (in the mobile application, on the web site, by sending an SMS with the card number to a short number or old school - by calling the operator on the hot line).



Cards were accepted only at Crossroads of Moscow, Moscow Region and in 4 supermarkets in the south of the country. The rolling out of the program for the entire Perekrestok trading network occurred only in 2010.



Under the basic conditions of the program, 1 point was awarded for every full 10 rubles. On the birthday of the buyer, 5 times more points were awarded (these rules have not changed much since then). When paying, you can write off points multiple of 10 (10 points = 1 rub.) And pay at least 100% of the amount of the check. There were no restrictions on the payment of tobacco and alcohol at that time. Golden times =)



The owner of the bonus card also had a web personal account, which could be entered by entering the card number and date of birth as a password. And what, then it seemed a fairly logical and secure solution =) Already in the first versions of your personal account, you could see the current balance, the history of purchases, accruals and debits, order an additional card and send a question. Later, in your personal account, it became possible to exchange points for partner rewards: promotional codes and airline miles.



Of the interesting historical facts, I want to note how in 2010, on the basis of the Perekrestok Club loyalty program, the Alle project was launched - a virtual mobile operator (MVNO) on the technical base of the MTS network. For the purchase of products at the Crossroads, the owner of the mobile number received packages from minutes for calls and SMS (no gigabytes of mobile Internet were available then).







Speeding up. At the end of 2015, the My Crossroads mobile app was released. First for iOS, later for Android smartphones. The proportion of smartphones on Mobile Phone was already vanishingly small, so they decided not to release the application for this platform. In the application, you can either issue a virtual card for free, or "transfer" an existing plastic card to the application. By presenting a card from the “My Crossroads” mobile application, you can add and write off points (a dynamic, copy-protected QR code is generated). It is noteworthy that the Internet does not need a smartphone. With the release of the application, there was no need to carry the plastic loyalty card with you.

In the same 2015, the program was replenished with a number of new mechanics. From a purely bonus, the program has become "multifunctional." There were coupons, personal discounts upon presentation of the card, express points (points with a short validity period), virtual stickers. A little later, the “second price” appeared (the price that acts on the goods only upon presentation of any loyalty card).



Since printers of fiscal registrars were not originally “sharpened” for printing graphics, for coupons I had to remember drawing with pseudo-graphics.







In November 2016, Alfa-Bank, the Perekrestok trading network and MasterCard offered customers co-branded cards. Card holders become participants in the loyalty program of the trading network, while higher points are awarded for purchases at Crossroads. In March 2018, the Perekrestok retail chain and MasterCard offered customers co-branded cards together with Tinkoff Bank.



In 2017, the Perekrestok retail chain launched the first insurance co-brand in Russian retail in conjunction with Renaissance Life, the Generous Life program. When making purchases in supermarkets of the network, program participants accumulate points of the Crossroads Club loyalty program, and part of the cost of goods is transferred as a contribution to the accumulative life insurance program.



The number of active participants in the Perekrestok Club loyalty program for which the company forms individual shares reached 5.5 million people in December last year.

Carousel Loyalty Program

In 2010, the turn came to Karusel hypermarkets. To replace the discount program, which worked in hypermarkets since 2004, the bonus program "Magic Card" was launched. However, two years later, the trading network decided to abandon the "classic" program and took the "Magic Card" out of circulation. And in 2013, Carousel launches a new loyalty program called Caviar. The program was also a bonus. When you purchase a Caviar card, 30,000 bonus points (the equivalent of 3,000 rubles) are immediately credited to the account. With these points you can pay for purchases, writing off 1000 points (100 rubles discount) at a time, but no more than once a week and with a check amount of 1000 rubles or more.







However, later on, “Ikra” was replaced by a new loyalty program with the unexpected name “Carousel” =). Classic conditions: for every full 100 rubles. the cardholder gets 10 points. The course when paying is the same as in the Crossroads Club (10 points = 1 rub.).

To complete the picture, the Carousel loyalty program has acquired its My Carousel mobile application. There is also a personal account of the program participant karusel.ru/account

Pyaterochka network loyalty program

In 2017, the Pyaterochka store loyalty program, “Help-card,” was launched. This is the youngest, but at the same time the most dynamically developing program. And besides, it is the largest in Russia - about 32 million people use it every month.



The main mechanics of the program are also bonus:

• If the purchase is less than 555 rubles, taking into account discounts, then 1 point is awarded for every full 20 rubles in the check.
• If the purchase is more than 555 rubles, taking into account discounts, then 2 times more points are awarded, that is, 1 point for every full 10 rubles.

At the same time, an increased number of points is awarded on the cardholder’s birthday (more precisely, even 3 days before, on the birthday itself and 3 days after it) and for the purchase of goods from the “favorite” category.



Following the release of the card, the loyalty program also earned a mobile application. It allows you to control your score balance, view purchase history and receive personalized offers. About 10% of program participants regularly use it. To date, the number of downloads of the mobile application exceeds 4.2 million. This is a popular and reliable channel in which hundreds of thousands of users can simultaneously be located - the application easily withstands a load of thousands of requests per second. By the way, for iPhone owners, the option to add their card to the Apple Wallet is additionally implemented - it’s even more convenient and faster to download the card’s barcode.



There are many advantages for the participants of the loyalty program - and this is not only the accumulation of points with which you can pay for purchases (the cost of 1 point is 10 kopecks). Firstly, it is the receipt of special offers that take into account personal preferences. Moreover, in the mobile application this is implemented by providing discount coupons. Secondly, the direction of partnership projects is actively developing. For example, cooperation with the social network Odnoklassniki allows you to exchange points accumulated on the “Help-card” for the currency of the social network - “Oki”. Thirdly, this is the “Children's Club” project, registration in which allows you to receive special offers for certain categories of goods and gives access to relevant, very useful thematic content.



One of the super-convenient features for users of the mobile application was the translation of paper stickers into electronic ones when using collectible mechanics in promotions. So the client will never lose his accumulated stickers and can control their number online.







Separately, it is worth noting that in cooperation with banks two co-branding cards were issued. The first is a Pyaterochka bank card from Post Bank. Its owners receive points for purchases in any stores, and in Pyaterochka - three times more. The second co-branding card - from Alfa-Bank - also makes it possible to accumulate points for purchases at any retail outlets, and in Pyaterochka it is twice as much.



And in May 2019, Pyaterochka became a partner of the St. Petersburg Single Card (ETK) project and introduced the “Help-Card” loyalty program into the ETK electronic card functionality.

What we can do

Today, a significant amount of personalized shares are formed using machine learning, and the speed of their preparation has increased sevenfold. This was made possible by connecting a trained CRM analytic unit.



With the help of machine learning technology, customers are segmented into groups with common attributes and proposals are prepared for them. The system analyzes data about the selected audience and creates models of personalized marketing campaigns taking into account several hundred behavioral and demographic factors. The analytical module takes into account the frequency and amount of purchases, preferences, factors that determine the lifestyle, an acceptable price level, favorite categories of goods and preferred time for shopping.

What does this mean for a particular customer? We, knowing the customer’s purchasing profile, knowing the history of his purchases, try to PREDICT his interest and offer exactly what is interesting to a particular customer. Unfortunately, the time for mass promotions of the type “Today there is a discount for tomatoes for everyone” is passing (or fortunately) and in order to make an offer you will find it difficult to refuse, we need to learn a lot about you. In fact, it looks like this: on a store receipt or in a mobile application, you get personalized offers tailored specifically for you. For example, “Dear Petya, for you a 30% discount on Jack_Daniel's 0.5 4-year-old so beloved chocolate Natulka with nuts for you. To receive the discount, present the discount coupon at the cash register along with the goods. ” A rare sweet tooth can resist such a tempting offer.



We also do not offer vegetarians meat and chicken, teetotalers - alcohol, diabetics - sweets, men - makeup products. Well, we don’t offer, let’s say so, try not to offer. Our artificial intelligence also sometimes has a bad mood and miscalculations. Do not throw slippers, if we offered you something wrong, you never know who you know.

How will it be

Epigraph

“We have such devices, but we won’t tell you about them ...”

Mango mango



There are many plans. Some are only at the conceptual and development stage, some are already underway. I will highlight only a few projects.



Personal offers are good, BUT it is important to convey them to the buyer when he is near the store, or just went into the store or went to the shelf with the promotional goods. It can be SMS, PUSH from our or a partner mobile application, a cashier’s address to you by name, a speakerphone message (the last one, of course, is a joke).



"Petya, do not forget to take the butter" Burenka Butter without GMOs. " Today it is at a special price of 999 rubles. ” We know the frequency of Petya’s purchases and that the last time Petya bought oil 2 weeks ago, and it looks like he ran out of it.



Aerobatics - to know what you have already put in the basket and based on this set to make you an offer in the moment BEFORE you come to the checkout. To find out what you have already put in the basket, for example, a customer’s scanner (Self Scan technology) can help us. And to find out where you are in the store will help us ... in general, there are also ways.



“Petya, for Mamber cheese, cranberry jam“ For Mamber ”is good. He is right in front of you. ” We know that Petya put Mamber cheese in a basket and stands in front of a shelf with jams.

A concept is being worked out when you do not need to present a loyalty card at the checkout. We will “recognize” you, add points, write off if necessary, print a coupon or send PUSH.



You probably know that at the request of the law, at any cash desk of the store you can be asked to send you an electronic version of the check in the form of SMS. But for now, this is controversial, as a paper check will still be printed. But what if you indicate once that you refuse paper checks and want to receive only electronic ones?



On this, perhaps, I will stop. Write in the comments if the topic of “store cards” is of interest to you, then next time I will write how:

• We wanted to display the balance of loyalty cards on price checkers (devices on which you can check the price of the goods) in stores. What went wrong and why it was necessary to urgently disable this function (spoiler - it was possible to disable it, but not at all quickly, although, it would seem, not Newton’s bin ...)
• Is it possible to fully and safely use the loyalty card (both for accrual and for secure deduction of points) through an affiliate mobile application?
• Why were the cashiers especially pleased during the promotion with taxi promo codes and what had to be done about it?

Below is a table on the loyalty programs of our networks (information is relevant at the time of publication of the article).







ALEXEY LYAUTKIN

Customer Solutions Architect