Case histories

Baby deal analysis

• How to drive total store spending
• Quantify ‘mega’ promotions
• Promoting ‘destination’ categories
• £millions ‘halo’ effect

One of our retail partners ran a series of deals in the Nappies (Diapers) category, and they wanted to know if these deals were helping to drive basket spend around the rest of the store (excluding what was spent on nappies). The hypothesis was that a promotion on nappies could fuel additional sales beyond just the “baby aisle”.

It was believed that these deals would attract the larger “family shop”, and that this would drive further basket spend.

We analysed the shoppers buying into the deals, what they bought in the deal and what they bought in the rest of the store. We compared this to their typical shopping behaviour, and behaviour after the promotion, to see if they did increase their spend across the rest of the store.

Our analysis showed that the various deals drove substantial incremental revenues in the rest of the store by customers buying into the deal.

The retailer subsequently gave the promotion more support, both in store and in terms of media support. This was done with the confidence that the promotion has a wider halo effect and could justify the media spend/lost margin.

Roast & Ground Coffee review

• De-listing products?
• Fair comparison
• Simplify range
• Substantial savings

One of our retail partners was looking to re-design their Roast & Ground Coffee fixture. A large number of potential delists had been identified. They had concerns that pure EPOS analysis did not reveal true competitive sets.

It was believed that customers generally liked the offering, but found the fixture busy, complex and difficult to shop. Specifically, they needed to know whether it was necessary to retain a separate Cafetière & Filter offering (unlike most other retailers).

Decision hierarchies and consumer repertoires were analysed, revealing true competitive sets. This resulted in a few surprises.

Additional cross-shopping and impact analyses were undertaken to understand the dynamic between Cafetière & Filter coffee. The range was simplified; availability was increased; changes to blocking and flow made it easier to shop the fixture.

Impact analysis was produced to understand the risk involved for SKUs marked for removal, redesign or tier re-assignment. A significant reduction in stocking points was realised. Costly de-list decisions were averted and the category saw growth as a direct result.

Femcare promotional analysis

• Multi-buy not efficient?
• Incremental category buyers
• Price Sensitivity segmentation

In September 2008, LMG I&C launched the Promotions module within Self Serve. This enables detailed analysis of all in-store promotions within a category, to enable comparison of promotion performance and to help determine promotional strategy.

Analysis within the Feminine Care category revealed some interesting insight into the performance of different promotions. Using the Promotions Key Measures report we were able to analyse a number of multi buy promotions, and observed that several performed poorly in encouraging customers to buy multiple packs of the product. In one example, a promotion had as little as 16% of transactions qualifying for the offer by having three products within the basket. Looking at average units per customer, these varied from 1.2 off promotion to 1.6 on promotion, indicating that this mechanic was not suitable for the product.

By contrast, comparing other promotions, we were able to see that the price discount encouraged twice as many customers into the brand than a 2-for-the-price-of-1 multi-buy on the same brand. The price discount drove up the sales on both the brand and the category by a significant amount, through bringing new customers into the category with some switching from other brands.

We were also able to segment customers’ shopping based on the proportion of their spend on deal. We quantified the level to which the most price-sensitive customers spent proportionately on deal, compared with those less price-sensitive customers. We were then able to look at which products these different customer groups bought the most, to identify the products where being competitive on price is most important.