Kyndryl Holdings, Inc. (KD) Earnings Call Transcript & Summary

Well, welcome, everyone. We're so excited to have you here for our next session. Drive enhanced customer experiences with the power of data brought to you by Kyndryl. My name is Lauren Selman, and I am the Vice President of Operations for the International Food & Beverage Technology Association. We still appreciate all of you being here today. We're very excited to have you here in the Amazon Pay stage as well as the food service innovation zone in the other room, which we hope you've all taken a look at. And now it is my honor to welcome Kayla Broussard to the stage.

Thank you. All right. So thank you all for coming. We're excited to be here. So happy that you're going to spend your afternoon with us. We've got a lot to talk about, a lot of excitement around customer experience and data in general. And I'm the CTO of the consumer and travel market here at Kyndryl. We're the world's largest IT services provider, huge focus on retail and stitching together technologies and different solutions for our clients to solve their biggest challenges. So here, we're going to talk about how data is truly the foundation of the customer experience. You could not accomplish a successful customer experience strategy without data, right? So look at these 6 phases. And if you're anything like me, all you see is data. First of all, how do you understand your target market and audience, right? There's 5 generations of consumers that are in the marketplace now, and you have to cater and attract all 5. And they've got their own likes and dislikes, some prefer the human touch, some prefer more self-service, right? So you've got to create that buyer segmentation and truly leverage that data to understand them. And then we get to the promise, right, define what your customers expect from you. And what distinctive advantages separates you from the competition, right? What is your particular promise that keeps them coming back for more. Why do they keep buying from you. I'll give a quick example. I think we're all maybe familiar with DoubleTree. It's a Hilton brand. I have a short story just last year in our business travel booking system. I booked a DoubleTree Hotel. And sometimes my travel plans get delayed in that DoubleTree cookie, which I do love ends up being my lunch and dinner because I missed lunch, I was at the airport running from one gate to another. And I got there, and they were actually in the middle of rebranding. When I booked it, it said it was a DoubleTree, when I got my keycard it said it was a DoubleTree, but they were rebranding to theWit. So I didn't get my DoubleTree cookie. So that promise of that scrumptious DoubleTree cookie, I didn't get it. So every company, every retailer or every brand, you have a promise of what your customers come to expect, and it keeps them coming back for more. And then you've got the journey, right? You need to understand and create a clear road map of your customer journey, and it has gotten more complex than ever. We are all consumers in the room, and we are shifting from buying different devices at any time, both digitally and physically. So we're leaving a footprint or a trail of data across digital touch points as well as physical touch points were in the store. And so you've got to be able to pull all that data together to understand the true customer journey and create a road map. The measurement. Now you've got to work on determining the approach and the frequency, how often you're going to measure, how are you measuring, what metrics, what do those KPIs look like, right? And you've got a rinse and repeat and adjust, especially in the retail industry, it can be very volatile. There's a lot of external pressures and you have to adjust and pivot accordingly. And then the evaluation, establish the way you evaluate your customer feedback, what does that look like? And what particular steps, whether they're with frontline workers or they're with customer service, are they're with e-commerce? What particular steps are you going to take to improve those pain points, right? And then last but not least is the improvement. Devising a strategy to improve the customer experience through appropriate corrective actions, right? Again, if you look at this, it's all underpinned by data. I mean I could be as bold to say that data in itself is the lifeblood of the customer experience strategy, right? There's a lot of technology that's out there in the stores as well as digitally. The mobile app, the mobile phone has become our own personal companion. And you've got to be able to create a unified customer view and stitch all that data together. So the connected experience is driven by data. What you see is here is just a quick teaser of some of the different data sources you've got to pull together. In order for customer experience to be successful, there's tons of data being sourced from both the physical and digital worlds. And as consumers are moving again between the different devices, physically and digitally, they're generating lots of data, and that data is getting scattered across different platforms, different departments. It could be sales, marketing, loyalty, promotions. A key element is to create that single customer view, which is aggregating the data from all those disparate sources and bringing it together, the actions that, that individual customer and when they took them. So in essence, it's really the touch points that they arrived throughout their particular journey. So it's everything that you see here, right? All the online and store order history; two, you're empowered and committed frontline workers, store associates, virtual agents, all the in-store sensors, there's a lot of investments in IoT, e-commerce interactions to the meaningful insights about the brands and the partners, what are my customers and influencers saying about me on social media, right? It's that social listening, pulling all that data together. At the end of the day, data is truly the fuel that powers the harmonized experiences. All right. So sorry about that. I don't know why it's not working. But without further ado, I'm so excited to share the stage with someone who is leading the charge on experiential commerce. As it relates to grocery, please help me welcome Ana Rosa. She's the Director of Strategy and Customer Experience at GPA.

Well, good afternoon, everyone. It's nice to be here with you.

Perfect. All right. So for those in the audience who may not be familiar with GPA, Ana, could you please give us a brief overview?

Absolutely. So before I get started, can I see with a show of hands how many Brazilians we have in the room? Okay. So we're half and half, okay. So GPA is a food retailer in Brazil. It's one of the largest, we operate in a mainstream banner, Extra Mercado as well as in a premium banner, Pão de Açúcar and we operate both in supermarket as well as convenience/proximity stores. We have over 700 stores across 14 states in Brazil. We have almost 40,000 employees and we are now #1 food retailer in the online space. So that's an interesting achievement. And since we're talking about data and customer data, specifically, we have almost 30 million customers in our database. So that gives us a lot of material to work and to improve the customer journey. So yes, this is us.

Perfect. Thank you, Ana. All right. So let's jump right in. It's the exciting part. So I think we can all agree that knowing your target market and associated customer segmentation is crucial, especially to GPA, so what technologies and capabilities does GPA leverage to truly understand your customers?

Yes. I think the most fundamental one would be the CDP. We just implemented last year the consumer data platform, a robust consumer data platform. And GPA, we have almost 80% of our sales are identifiable. So we have a lot of data that we can actually track back to the actual consumer who's making that purchase. And that gives us a lot of information. But data without the correct organization, it doesn't really work its purpose. So with the CDP, we're now being able to understand and decodify the purchase history of each [indiscernible] or each consumer to actually enhance or improve the offers that we give, so promotions, pricing, communications and decide the best channel, is it WhatsApp, Instagram, e-mail or and so on and so forth. So that's been super important in our journey to understand and talk better with our consumers. And something else that's been very interesting. We're not only doing improved offers based on the history. But we're also doing like multiple personas, right? So not big clusters as we used to do. So for instance, if you, Kayla and me, Ana. We have a very similar purchase history, but for some reason, Kayla has this taste for fine cheese and imported cheese and Ana doesn't really purchase yet. We're probably going to offer Ana with a very high chance of conversion because they are so similar and there's something else that we could offer Ana that she doesn't know that she wants maybe. So that's very interesting.

Thank you, Ana. I love that story. I mean, really getting down into understanding your customer, again, all driven by data. So clearly, you and GPA are doing amazing things in terms of really leveraging your customers' data. But the key is what kind of results are you seeing?

Yes. So we're still in the process of rolling out very tailored and personalized communications and offerings. But for the use cases that we are actually using, this new methodology, we're seeing around 20% higher conversion than just the regular promotions that we used to do. So that's huge and has a lot of potential going forward. We're very excited about it.

Well, 20%. So you mentioned the importance of offering personalized discounts, right? But the reality is other groceries are doing the same. So what distinct benefits does GPA provide that establishes your unique promise and sets you apart from your competition? And can you explain how the data itself provides insights that lead to the meaningful experiences? And how are you able to determine which offers you're going to provide to specific clients?

Yes, that's interesting. It's something we discussed a lot. So especially for Pão de Açúcar which is the premium brand, you're completely correct. So deeper discounts are not enough. Obviously, giving the correct discounts are very important because the client also feels like we know them, right? And that creates promoters, that creates fans of the brand. But other than that, we're trying to give meaningful experiences to our clients as well. And the data allows us to understand what is important to that particular consumer and especially what we call our most premium clients, which are the ones who have a much higher frequency. They go more than 3 times a week to our stores and they obviously have a much larger basket, much larger spend. And so an example of our recent one, we -- of our most loyal clients, the highest tier of our loyalty program. We understood who were the wine lovers and the specific wine lovers for this particular Argentinian brand. And so we partnered with the industry with that particular Argentinian wine, winery. And we took 20 clients, 20 of our premium clients to Argentina, to Mendoza to get to know the winery. So that expense really beyond -- sorry. Just the in-store purchase routine is just creating fans, as I said. And so that was a very interesting experience to our clients and to us. And that's we've been talking a lot about Retail Media and the fair. Our CEO, Marcelo was here yesterday, and he talked about the importance of Retail Media for the next upcoming years. And this is an example that it's not only ads and it's not only merchandising at the store, we're doing something else that is meaningful to the consumer. It's meaningful to the industry and for us as retailers as well.

Wow, love it. I wish some of the groceries where I shop with -- give me a wine tour.

Not eligible to go to L street, but unfortunately.

It's working again. Great. All right. So now we're going to get to the journey and the measurement itself. So all these experiences are certainly a major part of the customer journey. How are you using the customer data to build a program that's actually shaping their journey? And how important is your loyalty program? And how do you keep the data from going stale?