OJSC 'MAGNIT' (FRA:5M71) Magnit starts implementing AI-powered customer offering personalization

Transparency directive : regulatory news

14/12/2021 07:59

MAGNIT PJSC (MGNT)
Magnit starts implementing AI-powered customer offering personalization

14-Dec-2021 / 09:59 MSK
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The issuer is solely responsible for the content of this announcement.

Magnit Starts Implementing AI-Powered Customer Offering Personalization

Krasnodar, Russia (December 14, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia's leading retailers started introducing customer-specific promo offers. Using specially tailored AI-powered algorithms, Magnit will manage thousands of microsegments comprising its audience and provide them with the most relevant promotions through a number of different communication channels. The Company plans to roll out its CVM (Customer Value Management) tools in 2022.

With the launch of the new CVM capabilities, Magnit will completely transform the way it creates personalized promo offers and transition from manually managing promo campaigns for each specific segment to an automated system. Right now, the Company is updating its business processes to facilitate a full-scale roll-out in 2022. The project is being implemented together with the Boston Consulting Group (BCG) - a company with a strong expertise and extensive experience in similar projects with global retailers.

Hyper-personalized promo offers will be created using the data gathered via Magnit's loyalty program. As of the end of Q3 2021, it had almost 55 million participants and boasted over 65% penetration in sales.

Today, the Company develops generalized promo offers for segments of 100,000 or more customers, with a lot of the work on creating and uploading the messages and performing analytics done manually. The new system will automatically establish customer segments based on hundreds of different parameters identified during the entire customer lifecycle, craft special offers for a wide variety of groups, which may range from thousands of people to just one person, and evaluate promo performance on a daily basis. Dynamic segmentation will enable Magnit to create offers for every campaign. Self-learning algorithms will pair customer groups with the right mechanics (e.g., most relevant products, discounts, coupons, bonuses) at the right time, as well as pick the right channels to communicate such mechanics, including Magnit's app, push notifications, SMS, etc.

To implement CVM, the Company established three product teams consisting of data scientists, Big Data analysts, marketing specialists, and commercial experts. They will work under agile methodology - a set of flexible collaboration practices that enable teams to adjust processes rapidly on demand. Magnit plans to actively engage its suppliers in creating personalized offers, ensure joint support for their promotions, and increase sales of their products.

Lyudmila Podyapolskaya

Director of Department for Customer Value and Customer Experience Management at Magnit

"This represents a fundamentally new approach to how we manage our customers, one that focuses on creating the most effective offers tailored specifically to each customer's needs and communicating these offers via the right channel at the right time. Thanks to the best global practices brought in by BCG, after our algorithms are launched, Magnit will become one of the first Russian retailers able to operate thousands of unique promo campaigns every day. IT systems for CVM will be integrated with the existing tools, and the entire transformation process will take place within the Company's perimeter, which will help minimize costs and speed up the roll-out".

Nikolay Yakovlev

BCG's Managing Director and Partner, Head of Consumer and Retail Practice in Russia and CIS

"Today, personalization is no longer a fashionable trend - it is increasingly used as a tool to ensure competitive advantage, especially in retail. Over the last few years, many businesses started experimenting with personalized offers in one form or the other. However, based on our experience with leading global retailers, we see that companies achieving the best results are those that utilize modern AI-powered advanced analytics. This approach enables personalized promo offers to have more than double the output compared to mass promos".

For further information, please contact:

Dina Chistyak

Head of Investor Relations
dina_chisty ak@magnit.ru

Office: +7 (861) 210 9810 x 15101

Media Inquiries Twitter

press@magnit.ru @MagnitIR

Note to editors

"Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of September 30, 2021, Magnit operated 45 distribution centers and 25,315 stores in 3,840 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS 16 management accounts results for 9M 2021, Magnit had revenues of RUB 1,311.5 billion and an EBITDA of RUB 151.4 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.

Forward-looking statements

This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and/or store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.


ISIN:	US55953Q2021
Category Code:	MSCU
TIDM:	MGNT
LEI Code:	2534009KKPTVL99W2Y12
OAM Categories:	3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.:	129890
EQS News ID:	1257356


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