Luxottica Eyes Predictive Analytics for Customer Decision Engine

by   |   August 19, 2014 2:30 pm   |   0 Comments

For Italian eyewear manufacturer Luxottica, an effort to expand its use of predictive analytics beyond CRM and direct mail marketing will help it see the “next best action” for all its customers, across all channels, according to Tiziano Cembali, Senior Director of Consumer Analytics.

“We need a 360-degree view of the data, but it is not simple,” said Cembali, who spoke at a recent Predictive Analytics World event in Chicago.

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With net sales of $9.9 billion last year, Luxottica Group is a leader in premium, luxury, and sports eyewear, with more than 7,000 optical and sun retail stores in North America, the Asia-Pacific region, China, South Africa, Latin America, and Europe. Its own brands include Ray-Ban, Oakley, and Vogue Eyewear, among others, and it additionally licenses many more eyewear brands, including Giorgio Armani, Bulgari, Burberry, Chanel, Coach, and others.

In addition to a global wholesale network involving 130 different countries, Luxottica Group manages several retail chains in major markets, including LensCrafters, Pearle Vision, and ILORI in North America, as well as several others internationally.

This diversified footprint makes data integration and governance a very complex challenge, Cembali said, noting that the company has to integrate various dimensions of data, including purchase history, customer service, marketing, and a database of 40 million customer records.

Adding to the challenge, he said, new types of data, such as photos of customers wearing glasses, will have to be integrated into the current database.

But Cembali said he expects that the investment will be worth the cost because the Next Best Action decision engine should increase the return on investment (ROI) of marketing by between “30 percent and 80 percent,” depending on the channel.

Among the promising new generation of predictive models are time to next purchase, discount sensitivity, customer lifetime value, and association models, he said.

Cembali said other benefits of the Next Best Action decision engine include the following:

    • Building long-term customer relationships

 

    • Maximizing customer value

 

    • Standardizing messaging (which will reduce multiple messages and also reduce multiple offers)

 

  • Creating a seamless shopping experience across different customer touch points and channels

 

Cembali sketched out Luxottica Group’s plan to use a variety of predictive models for the company’s direct mail campaigns and, eventually, all of its marketing initiatives. He said the decision engine, which will include both predictive and heuristic models, will need to be tested for efficacy and repeatability. New opportunities for the wider use of the models, he said, include customer account, call center, and point of sale.

Ellis Booker is a freelance journalist based in Evanston, Ill. Email him at ellisbooker@gmail.com. Follow him on Twitter: @ellisbooker.


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