How to optimise your
delivery proposition
Client Story: NEW LOOK
The Approach
First, we set ourselves the task of answering some key questions:
- What was the impact on commercial performance of the current delivery proposition?
- What are the barriers to customers selecting different delivery options?
- How should New Look use their delivery mix to increase profitability and life-time customer value?
- Where are the opportunities to innovate upon delivery options in order to grow adoption by customers?
- How do New Look segment their customers to attract and convert them to the most appropriate fulfilment option?
To do this we completed two sets of activities:
- Customer Insight – we gathered and blended a variety of quantitative and qualitative customer insights, including voice of consumer surveying that helped us understand how the customer was experiencing the delivery proposition.
- Data Modelling – we designed a data-driven model to help New Look measure the impact of changes to the delivery mix. The model allowed us to input financial data and analyse the profitability of orders by delivery type, and to forecast the potential impact of changes to the delivery mix.
Armed with the insight and the modelling framework, we supported New Look in the execution of a series of tests on the delivery mix, using our model to forecast and report the impact of these changes in order to facilitate the progression towards a better delivery proposition.
The Findings
Our customer insight revealed several unexpected findings about the role of delivery mix on customer behaviour. With this newfound knowledge we were able to develop some hypotheses for testing.
New Look then commissioned Good Growth to run a series of tests to optimise free delivery thresholds and delivery pricing. By inputting a range of assumptions into our model prior to each test we were able to forecast the effect on profitability and customer acquisition. Once the test was running, we could observe the true impact and compare it with our baseline and forecast. Through this approach we were able to identify where our assumptions were accurate and where purchase behaviour varied in ways that we were not expecting.
THE RESULTS
With each successive test New Look have been able to optimise their delivery proposition to continue to offer great value to their customers whilst also protecting their margins.
