RE-DESIGNING BALTIKA GROUP’S LOYALTY SYSTEMS
Baltika Group is a fashion retailer operating five retail concepts: Monton, Mosaic, Baltman, Bastion and Ivo Nikkolo. Group brands are represented in Eastern and Central Europe. Baltika employs a vertically integrated business model, which means that the Group controls all stages of the fashion process: design, manufacturing, supply chain management, distribution and retail sales.
Each of the Baltika Group’s brands had its own loyalty program for retail customers with specific entry criteria, bonuses and technical support. Furthermore, country based idiosyncrasies had been developed within the same loyalty schemes over time. 5 different brands with 5 different loyalty programs on 5 different markets had created quite a complex customer relationship issue for the group. On top of that the discounts granted by different loyalty programs did not motivate repeated purchases, as the analyses showed and the costs of discounts had become a marketing waste. Baltika Group asked Target One to help finding a solution for making the loyalty systems efficient marketing tools again.
As the first step, Target One gathered customer insight from Baltika’s retailers of different markets. We studied carefully the behavioral data of the existing customers and idiosyncrasies of different regions. The collected data was then analyzed in order to establish patterns that work in different markets and for different brands.
Based on the market intelligence Target One created several scenarios for re-designing the existing customer loyalty systems and had them evaluated by the client. As a result of the well guided evaluation process, the solution, which covered all the brands and fitted all the Baltic markets as a single united loyalty system, was selected.
Finally, Target One described the framework for the new loyal customers’ bonus system and created the business requirement specification (BRS) for implementation in cooperation with the client. When drawing up the BRS, we took into account the clients’ IT capabilities and also the reusable technical features of the existing systems in order to minimize the implementation effort and investment. Target One also provided supervision and support throughout the implementation phase.
A new bonus program AndMore, which covers all Baltika Group’s brands and is applicable in Baltic markets was introduced, replacing 5 different legacy systems.
The time to market of the entire project was only 5 months.
The new system has clear advantages as to the previous loyalty programs: (1) it unites all brands and creates inter-brand synergy, (2) it’s compatible with all the e-channels, (3) the administration of the system is much more efficient.
The new loyalty program has proven its effectiveness in significant improvement in sales and customer retention.