Rapha is a road cycling clothing and accessories brand with a fast-growing online channel and 10 Cycle Clubs - selling products and featuring a café - in locations around the world.
Rapha was worried about the impact that a greater physical presence would have on online sales. Practicology had previously helped Rapha to select a new CRM system and so asked us to assess the real impact of store openings, and help to better forecast sales as it continues to grow.
Practicology created geographical radius bands from each of Rapha’s Cycle Clubs, and using its multichannel data identified customers who lived within each banded area. We assessed how online-only and multichannel behaviour changed as a result of a store opening; including average order value, annual value, lifetime value and churn.
There were some indicators that store openings did have an effect on behaviour, but fast-growing sales make the causes of underlying trends harder to attribute; so we drilled down and identified a number of false-positive effects.
For example, we were able to strip out the impact of promotional activity on online sales, as promotions created large peaks and troughs that masked the real relationship between store openings and customer behaviour.
We have been able to validate Rapha’s strategy of opening Cycle Clubs, and also created a model to help with sales forecasting as it continues to open new locations.
Rapha now knows that customers who shop in both its stores and online spend approximately three times as much as those who only shop online. There is a halo effect for customers within a certain distance of a Cycle Club, they tend to spend more money and purchase more frequently once they purchase online and in-store.
As a result, Rapha intends to continue to open Cycle Clubs.