Optima transformation story from an offline drug store network to an omnichannel one

9 Aug ‘19

LogoThe Optima chain is a network of offline drug stores located in the Udmurtia, Bashkortostan, Tatarstan and Perm regions. Drug stores are businesses that offer cosmetics, cleaning supplies, perfumes, and household goods in one place. Their main competitors are basic food stores and specialized online shops because they also present cosmetics and cleaning supplies in their lineups.

Results

Until 2016, the Optima drug store chain existed solely offline. In order to compete with other stores and retain its share in the market for online sales, the company launched an online store in 2017, following up with a mobile application in 2018.

In order to set up their omnichannel marketing, Optima came to Mindbox. The platform became a key player in managing all marketing processes and provided the brand with:

  • A comprehensive tool for connecting promos and recalculating promotional checks for retail on site and in the mobile application. Today, promos for all sales channels are set up via one service in a 2-10 minute span of time.
  • A comprehensive loyalty program in which the buyer is identified by a mobile number. Today, over 90% of all sales are provided by loyalty program participants.
  • Warehouse and brick and mortar store real-time inventory management, in order to realize online orders with retail carryouts.

Business growth metrics for 2017-2018

156%

Online order growth volume
(Comparison of 3 quarters)

72%

increase of on-site buyers

30%

average online check growth

Task

Since 2012, the Optima chain has been successfully growing offline, reaching 100 stores in the Udmurtia, Bashkortostan, Tatarstan and Perm regions. In 2016, the company saw it become increasingly more difficult to compete with offline stores. To retain their competitiveness, the company decided to go online so that clients could have the freedom to choose where to buy their cosmetics: in-store, online, or via a mobile application.

In order for promo offers and loyalty program terms to not differ between the store, site, and mobile application, Optima marketers had to integrate omnichannel marketing. This type of marketing aids in eluding situations in which discounts that were announced online end up being invalid at store registers.

To manage online and offline marketing from one system, Optima saw the need for a tool that will provide:

  1. A universal system for setting up promo offers at registers, on site, and in the mobile application.
  2. A convenient loyalty program that can cater to online and offline clients.
Arkadiy Kirshin
Arkadiy Kirshin,
Director of the digital communication and client relationship department at Optima

The formula we are marching towards is simple. Which is a relevant message to a priority channel at an appropriate time. This approach is based on the fact that we, the buyer, and client understand and utilize the «Treat others as you want to be treaded» philosophy. The realization of which lays atop personalization and an individual approach to buyers from one perspective, and presenting the most convenient brand communication channels from the other. Mindbox is just the right tool, which helps us realize our client relationship transformation plans and bring them to a totally new level.

Solution

To create their omnichannel marketing, Optima selected Mindbox. Initially we transferred the integration and setup stages of all promo offers into our services in order to achieve identical offers for all sales channels. Then we reformed the old loyalty program by integrating bonus points, removing plastic discount cards, starting to identify buyers by their telephone number be it on or offline.

Below we go over how we solved these tasks.

Setting up identical promo campaigns for retail, online, and mobile

To stimulate sales in retail facilities, Optima marketers are developing and launching promo campaigns. For example, when purchasing two facial care items, a customer receives a facial mask as a gift. Prior to Mindbox, campaign terms relevant to retail shops were connecting to in house cash register software made by Optima. This software would recalculate the check if it picked up on promo goods.

t took a day from the point when campaign terms were loaded into the software, and up until they appeared in the cash register interface. At the start, developers loaded info on the promo campaign into the system and then rebooted the registers. If an issue related to the campaign terms was discovered, the campaign got put on pause, and an additional slew of hours saw themselves spent on a solution.

It’s difficult to build omnichannel marketing with these types of promo campaign settings. First and foremost, in house software only handled retail cash registers. Making it practically impossible to connect it to new sales channels, be it online and mobile. Secondly, the current process of setting up a promo campaign was simply impossible without a developer team, which simply leads to unnecessary expenses.

Retail stores

We integrated ourselves with the cash register software in order to transfer settings and calculate promos in Mindbox, with the intention to use Optima registers solely for displaying these calculations. Now, Optima marketers can connect promos for the entire business by themselves directly in the Mindbox interface in around 2-10 minutes, depending on their complexity.

The recalculation of promo goods at the register takes less than a second, in reality the process looks like this: the cashier scans items, creates a preliminary check (precheck) and automatically relays it to Mindbox, where it is then checked for applicable promos (for each binned item), the check is recalculated and transferred back to the register.

We helped cashiers out by equipping their registers with a tip or help system. If there are goods for which there are applicable promos, a «Promo activated. You can add a gift or select a gift certificate» notification will spring up.

Screenshot of a cash register screen
Screenshot of a cash register screen. The tips aid the cashier by notifying him that a current buyer is now a participant of the «Opening” promo campaign. For every 500 rubles spent, the client is in order to receive a 150 ruble certificate for his next purchase.

Online store and mobile application

In order to synchronize online and offline promo offers, we integrated promo offer processing settings into the Optima website and mobile application with the help of Mindbox.

By combining offline and online sales channels within Mindbox, we were able to set up omnichannel discounts and promo offer distributions. If clients visit an Optima retail store and catch a 30% discount banner covering all cosmetics then they know that the same deal can be found on the site and mobile application.

The Optima omnichannel architecture model
The Optima omnichannel architecture model. Marketing control center – Mindbox

Mindbox Synchronized order information across all sales channels in Mindbox

For Optima, Mindbox executes the role of a central database. Within it, all offline client data, such as purchased goods, in which store, under which promo campaign a purchase is made, etcetera, is stored. In 2017, the business saw the launch of its online store with a separate base for online clients in «Bitrex». For clients to be able to create an order online and pick it up and pay for it in store, Optima developers set up a data relay from «Bitrex» to Mindbox.

Now, when information pertaining to an online order reaches Mindbox, we fix it and notify offline of the fact that a specific client wants to pick up his order in a retail store, for example the one on Lenin street. By the time this individual gets to the store, cashiers will already have the order prepared and ready to process its payment.

Launched an omnichannel loyalty program

The first loyalty program for offline was made by Optima developers. Clients were provided with a discount card that they would present at cash registers. Discount sizes depended on purchase amounts from the previous month. For example, you make a purchase in February for 1.5 thousand rubles and receive a 15% discount for March. If your total purchase quantity for March was less than 1.5 thousand rubles, your April discount gets taken down to 3%.

The drawback of such a loyalty program is that people need to constantly remember if they visited the store during a specific month and if they carried out enough purchases. Also, there’s the constant risk of forgetting one’s discount card and missing out on a deal, which is why the Optima team decided to recreate its loyalty program mechanic.

Initially, we transferred management of the loyalty program into Mindbox and changed the discount accumulation mechanic over to a bonus system. Now, for every 100 rubles in the check, a client gains 1 bonus point, equivalent to a 1 ruble. During a special offer period for a specific brand or group of goods, increased bonus points are given to buyers.

Bonuses can be used to cover up to 50% of the cost of an item. The discount size is automatically determined within Mindbox and is based on purchase histories, it is presented at the cash register or in the online shopping cart.

The new loyalty program
The new loyalty program is built on a point-based mechanic. Bonuses can be used to pay for up to 50% of the purchase price. One bonus is equivalent to one ruble.

The next step is to take physical discount cards out of the picture and to connect the site and mobile application with the loyalty program.

The task of transferring old discount cards to digital ones was placed upon the cashiers. They offered clients to register on the site and enter their old discount number within their user profile pages in order to save their bonuses. New customers receive digital discounts after registering on the site.

A required criterion when registering in the new loyalty program is to provide a mobile number. The discount is automatically tied to the number, this is done so a client can just call out his mobile number at the register instead of presenting a plastic card.

Each loyalty program participant has his own user profile on the site, mobile application, and register where his bonus point card number is stored as well as his quantity of bonus points and personal information. It’s irrelevant as to where a client is making his purchases in the store or online. Because Mindbox automatically takes a snapshot of the purchase, accrues bonuses, and updates this information within a users profile.

Card
Shoppers that use the mobile application can confirm their participation via two methods: call out their mobile number or present their card’s barcode
Shopping cart
If a client makes a purchase via the site or mobile application, he can then see the final purchase cost in the register with all discounts taken into account. If the client makes a purchase in the offline store, the final sum is presented at the register

Over 90% of all company sales are provided by loyalty program participants. 84% of all online and offline purchases are made by clients registers in the loyalty program. For comparison, good client engagement across the market and the same segment comes in at 65%.

Loyalty program penetration chart for July – February 2018 to 2019
Loyalty program penetration chart for July – February 2018 to 2019, respectively. For a similar business in the market, with proper indicators, a good percentage of client engagement is 65%

As per Optima’s observations, the bonus mechanic is more beneficial for the business. First off, buyers rarely burn all of their bonus points. On average, 20% of bonus points are conserved on accounts. Secondly, in order to use bonus points, one must visit the store more than once and make new purchases. Finally, store clients have a choice, and that is to buy items with a discount or accumulate bonuses.

Implemented the sale of omnichannel gift cards

Previously, Optima gift cards were emptied at registers with the help of an inbuilt chip, which carried denomination information. To read such chips, cashiers would insert the card into a smart card reader. Occasionally, the chips would become demagnetized or get rubbed out from wear and tear, attributed a dead weight status to gift cards and making it impossible to pay for a purchase using such a card.

We transferred the servicing process of gift cards into Mindbox and replaced chips with digital gift certificates. Such certificates can be used online and offline. The denomination of a gift is tied to a unique barcode. In order to utilize the gift offline, a certificate needs to be printed and its barcode presented to a cashier. To receive a gift online, the barcode number is entered into a «promo code» field.

To order a gift certificate on the Optima site, one needs to select the denomination of the gift and input the recipients email
To order a gift certificate on the Optima site, one needs to select the denomination of the gift and input the recipients email
Ekaterina Kyleshova
Ekaterina Kyleshova
CRM manager

The Mindbox CRM platform is clearly a flexible system. 95% of mechanics that we wanted to realize were already presented with a ready to go solution within the constructor, another 4% required some finalizing, which is carried out swiftly by Mindbox. While 1% of mechanics were met with alternative offers and needed to be placed in line for finalization. Future familiarization and further collaborations carry with them positive anticipation. Matters are always settled quickly, feedback is always available on behalf of project managers as well as the tech support department. It feels good when your colleagues evolve and announce all new innovations so that you don’t miss out on testing or utilizing new functionality which can increase loyalty, conversions, and ultimately sales.

Aided Optima in discovering their client’s interests and preferences

In order to build out client-oriented and omnichannel marketing, a business needs to feel well versed in the interests of their target audience. In order for Optima to better know their clients, we installed trackers on their site, application, and registers with the goal to start collecting data on buyer behavior: goods that are purchased on a monthly basis, time spent onsite and in store, last purchase date, etc.

For each Optima client, we automatically create a universal client profile in Mindbox, where we store the entire interaction between the store and client. Data from the profile aids in audience segmentation across various features and market hypothesis testing.

Buyers that did not visit the store in a while automatically fall in the outflow segment. These people are sent newsletters with gift bonuses so that they come around to the store and buy something.

Aside from segmentations over client life cycles, marketers are setting up communications for other grounds. For example, which communication channels with the brand are preferred by clients, at what time of the day are newsletters read, which goods are most frequently purchased.

A buyer that prefers to visit the store on a Friday evening will receive a letter on Thursday eve or Friday morning. And the client that purchases a facial care product once every two months will receive a reminder that the item in question is about to be sold out and it’s time to buy a new one.

 Sergey Anatolyevich Kydrov
Sergey Anatolyevich Kydrov,
Chief Executive Officer

Currently we have a perfect base for personalized marketing. And this motivates us a whole lot more than traditional methods of interacting with buyers, such as catalog spamming, flyers, television and radio advertisements. Motivation comes from the fact that we know when, where, and what our client is buying, as well as the reaction to our email, sms, push, and personalized offers. Advancing forward, theres a lot of work, a lot of things to discover in terms of transforming from a traditional offline network into an omnichannel one and from traditional to personalized marketing. I have to express my gratitude to Mindbox for helping us carry out our plans and aiding us in moving forward.

Ivan Borovikov
Ivan Borovikov,
Mindbox founder

Optima is an astonishing project. Before our eyes, we can see how a team carried out a fantastic transformation. In just two years our colleagues transcended from a regular brick and mortar deal into an omnichannel, practically service company. I am happy that we could help our colleagues a little bit with their transformation.

This success story was prepared by

Georgiy Rossinskiy

Georgiy RossinskiyProject manager

Ilya Tsirylnikov

Ilya TsirylnikovLoyalty Program Product owner

Arkadiy Kirshin

Arkadiy KirshinDirector of the digital communication and client relationship department at Optima

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