Luckin
Luckin has done a lot of co-branding in recent years, including the love story of the line puppy, Coconut Tree, Victoria's Secret, Chow Tai Fook, and football. Below, Lao Li will take you through the past few years from the perspective of data analysis. How does “Luckin Coffee’s user growth strategy” work?
Case source: Fanruan 2023BI Data Analysis Competition
Tools used: Fine BI
1. Business background
This analysis report hopes to collect consumers’ attitudes towards Luckin Coffee’s marketing activities and their evaluations of Luckin Coffee and competing products by understanding the user characteristics of Luckin Coffee, and then analyze the effects of Luckin Coffee’s marketing activities in various channels. On the Internet, we can gain insight into consumer preferences, explore the value of different users, and provide some suggestions for differentiated user operations and promotion strategies.
2. Analysis ideas
2.1 Analysis of brain maps
2.2 Analysis of theme dismantling
(1) Based on the user's information, the user's basic characteristics and consumption preferences are statistically analyzed, and the basic attributes of the user's portrait are described. User portrait is the basis of the entire user operation analysis.
(2) Existing user operations: Analyze existing users, identify pain points in existing operations, and propose operational strategies for existing users.
① Understand the consumption situation of existing users: analyze the RFM, NPS values, etc. of existing users.
② Combine the existing RFM and NPS values to analyze the main factors affecting user consumption behavior: products, marketing channels, and competitive environment.
(3) Incremental user operations: Analyze incremental users to understand their preferences and the bottlenecks in expanding incremental users at this stage.
① Understand non-Luckin coffee consumption preferences, including consumption power, consumption attraction points and satisfaction factors, and analyze marketing preferences, etc.
② Combined with the penetration rate of Luckin stores in the region, put forward store operation suggestions based on the distribution of non-Luckin users.
3. Analysis process
3.1 User portrait
(1) Conclusion
① Luckin Coffee has a very high penetration rate among coffee users, and basically all coffee drinking users have already drank Luckin. In the future, user operations should focus on promoting repurchase and trying to develop non-coffee users.
② The main audience of Luckin Coffee users is young users (mainly those born in the 90s and 00s). This group is born with Internet genes and is the main force of consumption. They pursue quality as well as cost-effectiveness. This is very consistent with Luckin Coffee’s positioning.
(2) Data interpretation
① Proportion of Luckin users: In this survey, 84.3% of the respondents have drunk coffee, and 15.7% have not drank coffee. The proportion of users who have drank coffee and drank Luckin Coffee is 91%, and only 9.0% of coffee users have never drank Luckin Coffee.
② Age distribution of respondents: Among Luckin Coffee users, 70.2% are aged 19-35 (of which 38% are users aged 25-35, which is 20.2% higher than that of non-Ruixing users in this age group).
3.2 Analysis of existing users
(1) Conclusion
① The taste of Luckin coffee is not outstanding, and coffee product consumption only exceeds one-third. Most users purchase Luckin products due to social needs or functional needs.
② The consumption frequency and amount of Luckin Coffee users are relatively low, and they generally develop the most customers. Users are still mainly low-frequency and low-unit-price users. User stickiness and loyalty are low, and there is an urgent need to improve user loyalty.
(2) Data interpretation
① The main reasons for buying Luckin: 36.8% and 30.4% of users buy Luckin products for social needs and functional needs respectively. Only 25.7% of users buy Luckin coffee because of taste preferences, ranking only third.
② Category sales proportion: In Luckin stores, coffee product sales account for less than 35%. Luckin Coffee's product matrix and expansion of consumption scenarios have effectively met diversified consumer needs and enhanced the brand's own competitiveness.
③ Provincial distribution of Luckin users: The top three Luckin users are from Jiangsu Province, Fujian Province, and Zhejiang Province.
④ Analysis of Rising user income: 43.2% of Rising users have student living expenses ranging from 1,501 yuan to 2,500 yuan, and 42.3% of social workers have incomes ranging from 3,000 yuan to 6,000 yuan.
⑤ 【RFM】
a. The R value is the time interval between the last time a user made a purchase in the store and the last time. The smaller the R value, the more active the user is, that is, the user is most likely to respond to several repurchases from the store. The proportion of users in the last 5 days is 67.9%.
b. The F value is the number of purchases made by users within a fixed period of time (within a week). The larger the F value is, the more loyal the user is. The proportion of users who purchase more than 5 cups is 20.46%, and the proportion of users who purchase 1-2 cups is 46.2%.
c. The M value is the consumption amount within a period of time (within a week). The larger the M value, the greater the contribution of users. 53.8% of users purchased less than 75 yuan, and only 21.1% spent more than 125 yuan.
d. Important value users, that is, high-quality users, account for only 6.4%. General development users, which have a promotion value of up to 46.2%, need to continue to provide benefits and strengthen habit formation. For general retention users, 22.2% of users are about to be lost. General value users, that is, users who need to be tapped, rank third, accounting for 8.2%.
⑥ [NPS] Luckin Coffee recommenders accounted for 38.2%, while detractors accounted for 35.9%, and the NPS value was 2.35% (Net Promoter Score = (number of recommenders/total sample number)*100%-(number of detractors/ Total number of samples)*100%), and it is generally believed that an NPS score of more than 30% is considered good, and the current gap is huge.
Product-side factors
(1) Conclusion
Luckin Coffee's store location and cost-effectiveness are the main reasons why users continue to purchase. In contrast, as a retailer that specializes in coffee, the quality of coffee beans does not attract users.
(2) Suggestions
① Luckin Coffee’s people-friendly positioning has enabled it to control costs to a certain extent and make certain trade-offs in the quality of coffee beans. According to the research and analysis results, you can also try to expand the customer base that is sensitive to coffee quality by creating mid-to-high-end products or sub-brands.
② Use marketing publicity and other methods to enhance users’ perceived value of coffee bean quality.
Marketing factors
(1) Conclusion
① The vast majority of customers purchase products through Luckin’s own channels, and private domain traffic is well maintained, which is beneficial to reducing costs and user operations.
② The effects of Luckin Coffee’s promotion channels are evenly distributed, among which celebrity activities are particularly effective in attracting new customers. Other channels such as building advertisements and APP platform activities have also achieved good results.
③ Almost all users are aware of Luckin’s joint activities. The highly matched hot topics and its limited new product marketing methods have a very good publicity effect.
(2) Suggestions
① Luckin Coffee already has a strong moat on the marketing side. Marketing activities can be combined with its own offline channels, which can not only reach users more efficiently, but also reduce promotion costs.
② Strengthen the maintenance of private domain pools, use promotional activities and other methods to wake up sleeping users and avoid user loss.
Competitive factors
(1) Conclusion
① The vast majority of Luckin Coffee users are also users of other brands of coffee, among which Tims Coffee, Costa Coffee and Starbucks are the main competitors for user operations, especially the operations of incremental customers.
② Compared with competing products, Luckin Coffee is at a major disadvantage in terms of purchasing channels, product quality, and packaging.
(2) Conclusion derived analysis
① Luckin, Tims Coffee, Costa Coffee, and Starbucks are all freshly ground coffee chain brands, with a high degree of user overlap.
② Based on the "main reasons to buy Luckin", the number one reason is social needs, and Tims, Costa Coffee, and Starbucks all focus on providing "third spaces" to meet customers' social needs and enhance the consumer experience, so these three The brand has strong appeal to Luckin users.
③ These three brands have relatively distinctive characteristics. For example, Tims focuses on the combination of coffee and warm food, Costa focuses on the quality of coffee beans, and Starbucks has a comfortable store atmosphere, which can easily attract consumers to try new products.
3.3 Incremental user analysis
(1) Conclusion
Most of the non-Ruixing users who are not coffee users do not have coffee consumption habits, but their single-item consumption ability is within the pricing range of Luckin Coffee.
(2) Suggestions
Luckin Coffee can leverage its existing brand influence to attract traffic through low-priced non-coffee products such as ice cream. At the same time, non-coffee drinks such as juice drinks and Reina Ice can also increase the conversion of non-coffee consumption habits.
Consumption preferences of non-Luckin users
(1) Conclusion
① For non-Luckin users, cost-effectiveness, convenience, and store location are important factors that they care about.
② Cross-border marketing and celebrity endorsements will not stimulate purchases by non-Luckin users, but discounts can boost consumption.
(2) Suggestions
In public areas such as Dianping and Douyin, coupons for non-coffee drinks such as juice drinks and Reina Ice, as well as coupons for best-selling coffee drinks, are set up to attract users to try Luckin by relying on product richness and discounts, and timely launch of weekly cards, Membership rights such as monthly cards are locked in the user cycle in advance.
Regional distribution of non-Luckin users
(1) Conclusion
① Henan, Jiangxi and Anhui have more non-Luckin users, and the number of stores is also lower than the average. Although there are many stores in Sichuan, Tianjin, Hubei, and Fujian, the number of non-Luckin users is very high, and the penetration rate needs to be improved.
② The stores in Hunan, Shaanxi, and Guizhou are lower than the average, but they have a good user base and have a high market share.
(2) Suggestions
Different provinces are at different stages. Different strategies can be implemented for provinces at different stages based on the distribution of the proportion of non-Luckin users and the proportion of stores in the province, for example:
① Non-Luckin users account for a large proportion but the number of stores is small (such as Henan): you can open more stores to lay out the sales network of the entire province to increase the convenience of acquiring customers.
② The proportion of non-Luckin users is small and the number of stores is small (such as Shanxi): These provinces have a good user base and can use social groups and other methods to promote activity in the private domain
③ Non-Luckin users account for a large proportion and the number of stores (such as Sichuan): strengthen publicity channels and intensity to improve the conversion of new users
3.4 Summary of Luckin Coffee’s User Operation Strategy
(1) Luckin Coffee’s Existing User Operation Strategy
① From the product side, Luckin can create mid-to-high-end products or sub-brands for high-quality customers to improve users’ overall satisfaction with the quality of Luckin coffee beans at a low cost; at the same time, Luckin can use marketing methods to strengthen users’ awareness of the quality of coffee beans. Perceived value can also effectively improve user satisfaction with product quality and promote user repurchase.
② From the marketing side, Luckin can focus on event marketing through its own offline channels. At the same time, it needs to pay attention to the richness of event forms, such as specialty coffee experiences, IP co-branded peripherals, etc., to optimize marketing effects while reducing promotion costs, and then Increase user repurchase.
(2) Luckin Coffee’s incremental user operation strategy
① In response to the price-sensitive characteristics of non-Luckin users, Luckin can efficiently attract traffic by launching low-priced single products and coupons for non-coffee drinks.
② According to the cross-analysis of the regional distribution of non-Luckin users and the distribution of Luckin stores, Luckin’s marketing coverage in Sichuan, Fujian, Hubei, Tianjin, and Zhejiang is low and the marketing promotion effect is not good. Therefore, these five regions need to focus on optimization and promotion. New strategy; since Henan, Jiangxi, Anhui, Hebei, Guangxi, and Jilin have fewer stores and fewer Luckin users, it is recommended to increase store coverage to increase user conversion.
(3) Luckin Coffee’s competitiveness optimization strategy
Combined with the relative advantages of the Top 3 competing products (Starbucks, Costa, Tims), Luckin Coffee can increase cross-industry cooperation and further increase channel convenience. At the same time, it can actively collect customer feedback and optimize products and packaging.
4. Complete data analysis report
This case comes from Fanruan 2023BI Data Analysis Competition. The overall analysis idea is clear and the visualization is highly beautiful. It is worth learning from everyone. If you think it is good, you can leave a message and like it!
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