Sharing our Vision Collaborative Business Plans
The CCO Team Carolyn O Grady-Gold Merchandising Erik Penno ecommerce Chief Customer Officer Kerri Dawson Marketing & Customer Intelligence Todd Bliss Customer Experience Rafik Louli Retail Operations Jackie Bonic Store Development & Real Estate
Customer Segmentation
Why a New Customer Segmentation? Previous segmentation now 10yrs old The market has changed Millienials are older
The Survey Respondents Total Sample n = 3006 When = November 2017 Region 18% Northern Gender 47% 53% Shopping Frequency For any beverage alcohol 16% Eastern 26% 20-34 yrs Age 21% 35 49 yrs Weekly 21% Monthly 68% 28% Western 39% Central 50% 27% 50% 50 64 yrs 26% 65+ yrs Less Often 11%
Shopping for Beverage Alcohol in Ontario Ever Purchased Alcoholic Beverages LCBO: 99% The Beer Store: 82% Grocery Store: 58% Only LCBO: 11% LCBO & The Beer Store & Grocery Store: 51% LCBO & Grocery Store: 7% LCBO & The Beer Store: 30% One-half of Ontario beverage alcohol customers shop across all major channels LCBO, The Beer Store and Grocery Stores. 3-in-5 have ever purchased an alcoholic beverage from an Ontario grocery store.
Big Picture: 53% of Ontario residents purchase beverage alcohol at least monthly 53% Age 20 Age 65+ Base: Total Contacts, n=8359. Those who purchased any alcoholic beverage in the past 6 months. 7
Access to beverage alcohol through the grocery channel is quite pervasive Access to the Grocery Stores that Sell Wine/Beer/Cider 81% report they have access to a grocery store that sells wine/beer/cider in their area 12% have some knowledge about wine/beer/cider availability, but cannot name a specific grocery retail banner 6% are unaware of grocery beverage alcohol options in their area Grocery Store Particularly among residents of the Northern and Eastern regions (15% and 16%, respectively)
LCBO is most likely to be shopped at least monthly, regardless of category Wine Beer Spirits Coolers Cider Past 6 month purchase incidence: 92% 89% 79% 54% 43% % Shopping at Least Monthly: LCBO 80 LCBO 52 LCBO 48 LCBO 41 LCBO 35 Grocery Stores Wine retail shops 18 19 Grocery Stores The Beer Store 20 53 Distilleries 8 Grocery Stores The Beer Store 20 21 Grocery Stores The Beer Store 12 16 Wine brokers/buyers 9 Breweries 13 Breweries 11 Wineries 8
Master Assortment Strategy
LCBO Merchandising Strategy Exclusives Spirits +4.1% Vintages +4.2% ecommerce +138% Wines under $10.95 +11.6% Shared LCBO Wines +1.7% Beer & Cider -0.3% Supported with data-driven, analytical Planning and Operations, enabled by technology
Focus On Vintages
End Aisle Program
New Merchandising Standards
Wines Integration through Zoning
Focus on Spirits
Spirits Domination
Enhanced Tastings
New Spirits Merchandising
Focus on Local
Focus on Local Wine
Focus on Local Beer
Focus on Local Spirits
New Beer Merchandising
LCBO Shopper Feedback Difficult to notice new products Hard to find what they are looking for Little information to help make an informed decision when trying something new Shoppers want section organized by segment Growing perception that grocery has more craft beer
Beer Market Share Change in Rolling Value ($) Share 661 Stores 26.7% Share 450 Stores 68.5% Share 232 Stores 2.9% Share
What s Changing FORMAT CENTRIC CUSTOMER CENTRIC
Current State: Three Spots
Future State: One Spot to Shop - One Spot to Stock!
New Excitement Zone
New Merchandising Toolkit Change #6: New Merchandising Toolkit
Easy to Shop
Products of the World
The Customer Experience
Create Better Merchandising Current State Wine Beer Spirits RTD
Define Zones for the Customer
Create More Opportunities
Execute Brand Spotlights
Grow Gifting Business
Education and Communication
Same Day Pickup
Same Day Pickup Customer Journey Visit lcbo.com or mobile app Shop Pilot Store s Assortment Pay Online Go to Store Within Hours
Same Day Pickup Customer Journey Pickup Orders Here Visit Click & Collect Area ID Check Acknowledge Pickup Take Order
ecommerce
Online Assortment +6000 skus LCBO Products of the World Vintages Canadian Inter-Provincial (3,292) (2,286) (448) (4)
Looking Ahead Dedicated ecommerce Team
Dedicated Capabilities Design & User Experience Operations: Order Flow & Service Tools & Platform Strategy Connectivity to Store Online Merchandising & Assortment Curation Analytics & Optimization
Looking Ahead The Digital Vintages Customer VSO Food & Drink APP Experience Needs Love LCBO.com LCBO APP Food & Drink Web
Immediate Priorities
Interface Consistency & Intuitiveness
Fly Out Menu
Product Findability
Setup Standards and Tools Tuning
Rollout Click & Collect
Accelerate Roadmap with the Resource Investment
Time & Motion
Goals & Objectives $9.7M Savings Standardized Processes Establish Ownership and Maintenance Enhance Customer Experience Consistency in Stores Improved Staffing Improved Budgeting Improved Scheduling and Planning
Standard Operating Procedures (SOP) Activities Cashiering Receiving 17 major activities covering most activities in-store Customer Engagement Stocking Warehouse to floor 5 priority activities covering 80% of labour Stocking Door to Floor
Retail s SOPs Efficiency Gains 40% 35% 30% 35% 30% 34% 25% 20% 19% 21% 21% 24% 15% 10% 5% 7% 3% 4% 0% Receiving Stocking Cashiering Customer Engagement Other APT Activities Deloitte's Study First SOP Rollout Group
Education & Communication at Retail
Launch of Product Knowledge E-Learning
Launch of Product Knowledge E-Learning PK for New Hires Core/Mandatory Advanced/Aspirational No time limit 3 Months 3 Months 3 Months 3 Months Core Foundations Core Grape Varietals New World Old World Beer, Sake, Cider & RTD Spirits & Liqueurs Sparkling and Fortified Advanced 8 Units = 125 Modules (includes advance)
LCBOConnect Version 2 New Features
LCBOConnect Version 2 Enhancing the Customer Experience
Customer Engagement
LCBO Customer Engagement Model Rational Connection Emotional Connection DRIVERS Shopping Ease Enjoyment Empowerment Corporate Citizenship Responsible BENEFITS Feel Relaxed Unique Offerings Unique Imagery Excitement IN-STORE Fulfilled My Goals Helped by Staff Social Well Stocked Information
Total LCBO Customer Engagement 2017 10 9.0 Target - 7.0 Achieved! 8.0 7.0 6.8 6.8 6.6 6.7 6.8 6.7 6.9 6.9 7.0 6.0 5.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Mean score out of 10
Helped by Staff 10 9.0 Helped by Staff 8.0 7.3 7.5 7.6 7.6 7.5 7.5 7.6 7.6 7.7 7.0 6.0 Mean score out of 10 5.0 2009 2010 2011 2012 2013 2014 2015 2016 2017
Well Stocked 10 Well Stocked 9.0 8.0 7.7 7.7 7.8 7.6 7.7 7.7 7.7 7.7 7.7 7.0 6.0 Mean score out of 10 5.0 2009 2010 2011 2012 2013 2014 2015 2016 2017
Be the Headquarters for Learning
HQ for Learning Enhanced in-store signage WINE STYLES BEER STYLES WHISKY STYLES RTD STYLES
HQ for Learning Enhanced Tastings
HQ for Learning Profile In-store Experts
Profile In-store Expertise Staff endorsed fixtures
Profile In-store Expertise
Personalization
Customer s Digital Path to Purchase BEFORE DURING AFTER Hello Eva! Welcome back Eva! Personalized Email Hello Eva! Personalized Email Customized Website mylcbo App Customized Website
In-Store Tastings & Vintages Events
In-Store Tastings LCBO customers were greeted to over 30,000 in-store trade sampling events last year
Vintages Events
Centralized Assortment Planning
What is CAP? Centralized Assortment Planning
Why CAP?
Building a Foundation for CAP Laying the foundation for CAP: MDM (National Product Registry) Analytics Clustering Location Planning Store Analysis
Merchandise Management System Customer-Centric Merchandising Demand National Product Registry Master Data, Performance Item Management Macro Space Space Constraints Assortment Merchandise Financial Planning (MFP) Bottom Up Performance Category Roles and Targets Central Assortment Planning (CAP) Assortment Segments, Clusters, CDTs, Transference Market Data Customer Insights Space Planning System Pricing & Promotions Systems
To deliver remarkable experiences as the trusted destination for the world s wines, beers and spirits.
Sharing our Vision Collaborative Business Plans