New Look is one of the most successful multi-channel fashion retailers in the UK. But like everyone, they have faced numerous challenges as a result of the COVID Pandemic.
As buying behaviour shifted from stores to online, New Look had to adjust its delivery options and pricing to meet customers’ new expectations.
In March 2021, New Look engaged Good Growth to help reassess their delivery proposition and evaluate whether it was driving the best value for the customer and for their business.
New Look wanted to understand how changes to customer buying behaviour might influence their delivery choices, and whether a better mix of delivery options could drive higher customer acquisition and long-term customer loyalty.
By providing us with a better understanding of the role of delivery in driving customer acquisition and loyalty, Good Growth have given us the confidence to test and optimise our delivery mix.
Our new delivery offer remains one of the most competitive in the market and offers great value to our customers, but by optimising the mix we have also improved our profitability.”
First, we set ourselves the task of answering some key questions:
To do this we completed two sets of activities:
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.
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.
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.
Multi-channel retailers face a challenging period ahead despite the re-opening of the high street. It is unknown how customers will respond to the long-term effects of the COVID pandemic and how any changes in behaviour will affect the commercial performance of high street shops as well as ecommerce.
Understanding changes in behaviour and responding to them in a way that provides the best possible customer experience, whilst also protecting commercial profitability, will require retailers to take an expansive approach to behavioural analytics to inform their commercial strategy.
Developing a delivery proposition that offers customers a competitive and comprehensive set of delivery options, and protects margins, will be an important factor in securing a stable future.