Woolworths
After opening its first store in 1931, Woolworths has become an iconic presence in South Africa’s retail landscape, serving as a trusted staple for affordable, quality goods. On approaching BSC, Woolworths needed a reliable way of accurately measuring uplift in the Vitality Healthy Food programme - a calculation that would help prevent the over-issuing of rebates to one of their affiliate partners.
THE CHALLENGE
Keeping revenue fair and healthy
As a renowned retail benchmark, Woolworths attracts numerous affiliate partnerships with brands keen to strike up co-branded retail incentives aimed at enhancing their own customer offerings and loyalty.
In this case, the partner brand was Discovery - a South African financial services provider offering eligible customer rewards on thousands of Woolworths HealthyFood range.
As part of the partnership agreement with Discovery, Woolworths would issue routine rebates to account for customer uptake and sales resulting from the shared Healthy Foods incentive. The challenge? Avoiding excess rebates that would unjustly impact Woolworths’s side of the bargain.
SOLUTION
Custom-crafted calculation capabilities
In order to satisfy the goals set forth by Woolworths that sought to buffer partner over-reimbursements to, BSC would need to custom-develop a rebate calculation method able to balance repeatability, speed and accuracy.
To achieve this, BSC employed what’s known as ‘test-and-learn’ pre-transition matching, plus an effect-size calculation method to be deployed on customer cohorts where such a method could reasonably be leveraged.
Additionally, BSC implemented a novel technique for measuring uplift for pre-measurement-period cohorts. This method involved what’s known as ‘control selection’ via proxy-variable matching, and dynamic customer cohort segmentation able to adapt throughout each predefined uplift measurement period.
Before deployment, the bespoke methodology developed by BSC was validated against cohorts with a defined transition against the traditional test-and-learn approach over two measurement periods, producing statistically indiscernible results.
SUMMARY OUTCOMES
Sound thinking, sound results
Over three years, Woolworth reported having proven the effective accuracy and consistent results generated by the customised uplift calculation model developed by BSC.
Moving forward, thanks to a BSC-created code repository, the Woolworths team can continue to calculate - independently and accurately - annual uplift in the shared Healthy Food incentive between Woolworths and Discovery.
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