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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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