Success Story: Citrus

  • How Machine Learning helps the Ukrainian chain of gadget stores to improve customer offers



  • About the company

    Citrus is a national chain of stores that has been selling gadgets and innovative technologies since 2000. The company is an Apple Authorized Reseller and remains one of the leading sellers of electronics in Ukraine. Today Citrus is an online-store and a network of 52 shops that work in a format that is unique for Ukraine. The shops are innovative entertainment centers with an open access to the products, interactive areas with virtual reality, e-transport and smart home gadgets.

    Situation

    The world’s technical consumer goods market in 2019 has increased by 6% and make up 138 billion euro. According to GFK, in 2018, the revenue of consumer electronics in Ukraine – the product segment of Citrus – increased by 30% and was 11,3 billion hryvnas. In the realities of the fast-growing market and high competition, it was important for Citrus to attract more clients while not losing the existing ones.

    However, over the last few years, Citrus has been noticing clients’ outflow due to the absence of quality personal offers. Communication expenditures have been growing: the price spent on messages in Viber grew by 50%, online advertisement inflation – by 30%; while the applied tools did not increase the number of clients. The marketing team had to double their work without gaining the expected results.
    In such circumstances the company decided to implement artificial intelligence technologies in order to improve its client service and approached SMART business.

    Goals

    The main task of the project with SMART business was to increase conversion and clients’ response to the advertisement campaign and marketing messages, increase loyalty and start choosing optimal communication channels with the clients.
    As the project launched, Citrus decided to test the system on selling smartphones as the main and the most popular category of products.

    Solution

    To achieve the goals, SMART business offered Citrus its solution – SMART Next Best Action. Technical part of the solution is based on the Microsoft Azure platform. Using machine learning algorithms, the model completes behavioral segmentation of clients and creates personalized offers based on the collected data.

    Personal target mechanism is universal: at the first stage, the collected data is analyzed, which is followed by the behavioral segmentation. Citrus’ solution was special due to the data presented by the company: purchase information, website traffic, products’ characteristics and products’ prices.

    “The machine considers several factors and is trying to model client’s behavior. The model recognizes similar groups of people based on the particular behavior and analyzes, which factors connect them.” ”

    Author's imageDmitriy SolopovBusiness Development Manager at SMART business

    SMART business solution uses the internal information – visiting history and the client’s previous behavior, price indexes, the number of purchases, as well as the external information – demographic factors, day of the week and time. It also collects information about the advertisement experience and visits from the various communication channels. All the information is aggregated and passed to the model in order to measure possibility of a purchase by each client.

    “Previously, the communication process with the clients was manual – all the selection was formed individually by the managers using only information on purchases, stored in the CRM system. The implementation of a machine learning model allowed us to collect and evaluate all the data that affect clients’ choice.”

    Author's imageSergey KolchikHead of CRM & analytics department at Citrus.

    The model takes into consideration not only previous experience of each client, but also the life cycle of the gadget, demographic factors and what effect the price has on a client’s behavior.

     

    Project stages

     

    Results

    The result of SMART Next Best Action solution is clients’ engagement cycle based on artificial intelligence. Effectiveness of the solution is measured by conversion, purchasing percentage increase in comparison with the online traffic or other activity.

     

    “The increase in effectiveness exceeded our expectations that we set at the start of the project. Comparing to the basic principle of clients’ selection made by hand, the model increased the conversion into a purchase by 2% – meaning in 4-5 times! And after using client’s geographical location and sending geo-push notification, the response conversion has increased by 51%.”

    Author's imageSergey KolchikHead of CRM & analytics department at Citrus.

    During the testing process, Citrus sent 50 000 messages with which two parameters were checked:

    • “clickability”, which indicates that the clients clicked the offer (around 10% of the clients), and
    •  the number of clients, who made a purchase after receiving the offer (conversion into a purchase increased fivefold).

    “We improved what to recommend, when to recommend and through which communication channel.”

    Author's imageDmitriy SolopovBusiness Development Manager at SMART business

    “By implementing our solution, the Citrus’ team got a better understanding of the client’s motivation to purchase a product and how the communication process works. From now on, the communication is personalized – using the appropriate communication channels, taking into account information about the clients themselves and their preferences. Our partnership does not end with this – there are many projects and possibilities to come.”

    Author's imageKirill RudnevManaging Partner and Co-founder of SMART business.

    Further Plans

    The next stage of the partnership between the two companies will be reduction of the clients’ outflow and integration of SMART Demand & Forecast Planning to further improve evaluation of the inventory in stores and warehouses. Later, Citrus is also considering personalizing not only offers for each client, but also the price of the offered product.

    Additional information

    Citrus, one of the leading vendors of electronics in Ukraine, is a national chain of stores that has been selling gadgets and innovative technologies since 2000. Citrus has developed their own network of automated service centers and e-transport rental places, as well as unique educational spaces “CeHAB” and “Citrus Academy”. To learn more about Citrus and their products, visit the website.

    SMART business provides services on development, maintenance and training of the ERP and CRM systems, systems based on predicative analytics and artificial intelligence. For 10 years, the company has been consulting and creating proprietary solutions based on Microsoft products, including Microsoft Dynamics 365, Microsoft Office 365, Microsoft Azure, Microsoft Power BI, as well as Data and AI technologies. SMART business has guided digital transformation in companies of different sizes, across different industries and sectors in more than 60 countries worldwide. More about the company you can read on the website.

    Infographic of the Case

  • Learn more about

    Contact us to get more information