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Retail 10th July 2017 - 4 min read

What we learnt at the Managed Pubs Conference

By Shobana Balasundaram

We were delighted to attend the Managed Pub conference last month, at the Honourable Artillery Company London. It was a great day with an opportunity to discuss some of the key issues that are facing pub operators and suppliers.

One of the key questions that was discussed at the conference was how pubs can stay relevant in today’s market, which, given market forces is proving a real challenge. With 1200 pubs closing this year and drinking being rated the 16th preferred activity (in a recent survey of 18-24 year olds), never has the focus on consumer and operational efficiency been so tight.

Keesup Choe, CEO of Pi hosts the CEO Summit

Our CEO Keesup Choe presented three disruptive applications of data that could be used to help managed pubs increase operational efficiency and improve profits, something that has been very useful for our client Stonegate who have seen their profits rise by 19% by partnering with us to understand all of their data.

The first is basket analysis. Data can be used to identify buying patterns and any changes to those patterns to understand the shopping behaviour of your clients. For example if you discover which food options are selected together, you can organise a promotion on these frequently bought items.

Potential result: merchandise assortment: placing those baskets of products near each other to promote cross sell, tailored promotions that will boost sales and effective inventory management

Another opportunity is forecasting. Traditional forecasting doesn’t account for wiggles in your data ie., lots of seasonalities. However, you can incorporate event schedules, local weather forecasts and use data to forecast very accurately the expected footfall.

Potential result: tailored workforce management.

Lastly, clustering should form part of your data strategy. Use your 3 year sales data to identify groups. You can select even 50 or more parameters that influence customer behaviour such as location, average transaction value, basket size, weather, demographics, payment methods, etc, apply those to the historic sales to cluster your customers into clusters or segments. Potential result: tailored promotions: Such powerful customer segmentation models will enable a retailer to personalise offers and promotions to improve response and revenues.

Data: a goldmine for the pub industry

In an industry where customers range from 18-24 year olds, who use technology to share their experiences to more seasoned clients who value service quality, the “single view of the customer” is so important in unlocking some of the key insights required for revenue management but as data is fragmented across channel and payment method it can be very difficult to achieve this.

One of the opportunities is to use a loyalty card to track spend and frequency in a similar way that DunnHumby has done with Tesco.

However in the pub sector, this is in its infancy and many CEOs were sceptical of customers desire to have yet another loyalty card. However some pub chains have had some

success with Apps, City Pubs(link to twitter handle of Clive Watson at City Pub Company), for example, have invested heavily in their City Club app acts as their loyalty card scheme, location finder and also has an impact on staff loyalty. Their goal is to ‘to join the dots’ on the customer experience and ensure that the customer experience is the same across all their locations. Their ambition is to grow nearly two fold in the upcoming period.

Another avenue to explore is social media and use Google location based targeting, Facebook and foursquare to engage the hard to reach millennials with tailored promotion based on location tracking with a goal to increase footfall. If this information could be tied together with POS data Managed Pubs operators would have the complete view of the consumer which would form a solid basis to build analysis and insight.

Ei Group – Case study:

An interesting data-driven case study was presented by Ei group.  They showcased how they applied data in a segmentation model, focusing on:

  • segmentation of retail pub estate
  • operating models

In order to achieve asset optimisation and asset transition. The segmentation model allowed them to segment their pubs into 12 different categories ranging in pricing/ customer type from ‘value’ to ‘premium’ and varying in food mix depending on the ratio of food and drink.

Ei matched each site to this matrix, factoring in the following variables:

  • Location : neighbourhood/ urban/ rural etc.
  • Demographics: customs/ catchment/ drive time etc.
  • Competition: direct/ indirect etc.
  • Amenities: facilities/ car park/ kitchen /physical attributes etc.
  • Format: food/ drink offer/ pricing etc.

This allowed them to optimise recruitment marketing, suppliers, volume, marketing, and is a perfect example of how pubs can use data to drive efficiencies and improve price margins.

Is Data in your Top 3 priorities?

At the CEO Summit, we posed the question: ‘Is data one of your top 3 priorities for the next 3 years?’ Without a clear focus and data strategy it will be difficult to realise the benefits that our clients such as Stonegate have achieved. As Peter Drucker said, if you can’t measure it, you can’t improve it.

So, is data one of YOUR top 3 priorities for the next 3 years? If not, it should be. Click here to learn how we helped Stonegate Pubs apply data intelligence and predictive insights to increase their business profits.

Shobana Balasundaram
By Shobana Balasundaram
4 min read

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