Industry

Consumer & Retail
Retail

Company Profile

  • $6bn annual revenue
  • Grocery retailer with a mix of supermarket and hypermarket stores
  • 12,000 SKUs

Situation and Objectives

  • Optimize the promotion strategy to generate more revenue and profit
  • Identify algorithms and rules for an optimal promotion strategy
  • Develop a promotion tool to support key stakeholders in their decision-making

Approach

  • Build a promotion database consisting of ERP and ticket data as well as all promotion-relevant data and external impact factors (e.g. weather, holiday seasons)
  • Asses the current promotion strategy by analyzing promotional effectiveness with econometrical models and a customer survey
  • Design rules to implement the optimal promotion strategy considering guardrails from the company strategy
  • Develop a promotion tool which helps to implement the promotion strategy in daily business using the defined rules and most up-to-date information base
  • Train key stakeholders to use promotion tool in daily business

Product value and price categorization

Results

  • Promotion strategy with clear rules on promotion design, i.e. category/item selection, promotion type, discount level and communication as well as in-store/out-of-store media
  • Promotion tool with direct connection to all necessary data to support key stakeholders in promotion decision-making
  • Trained personnel who know how to apply the promotion tool and thereby the promotion strategy and rules in daily business

Impact

  • Uplift of frequency during promotions by 8%
  • Uplift of promotion sales by 15%
  • Uplift of promotion profit by 9%

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