In-Store Promotions
International category leader experiments with various in-store promotions
The Company
An international category leader, retailing in over 50,000 locations
The Challenge
The client was investigating a major capital investment in re-branding in-store fixtures. While customer research indicated that the $5K+ per store investment could significantly increase point of sale conversion, the company was not seeing a strong customer response after debut of the refreshed fixture. Various in-store marketing promotions were considered, but there was internal disagreement as to which tactic would be most effective in driving visits to the fixture.
The client looked to APT's enterprise Test & Learn software to identify the most profitable strategy.
The Solution
Using the APT Suite, the manufacturer first focused on optimizing test design. Not only were there numerous potential marketing levers to consider (i.e. in-store signs, coupons, labor, circular inserts etc.), but each retailer partner had varying clean floor restrictions delineating what would and wouldn't be permitted in their stores. APT's hypotheses generation tools aided in managing the many inputs to consider in testing enabling the client to identify the three promotional opportunities which had the greatest potential to increase sales within the constraints of a limited budget.
Prior attempts to analyze similar programs were fraught with challenges. How many sites would be required to test each program? How long would the test need to run to get statistically significant results? How should comparison groups be selected against which test stores performance could be benchmarked? Should control stores be selected from surrounding stores in a market or should control groups be limited by retail brand? Would test results from a regional discounter hold for a national department store?
These questions weren't academic matters - using one control group made the program very profitable while another made the program look flat at best. APT's patented simulation technology was employed to determine answers to all of these questions, ensuring a correct read of the program. While all programs were effective in increasing sales, in-store labor was found to generate the greatest return on investment on average.
Test & Learn analysis did not stop here. Results were segmented for each promotion to determine demographic and store characteristics associated with success. Models were built on these principles and applied to the broader retail network to recommend the optimal in-store marketing on a market-by-market and retailer-by-retailer basis.
Results
Management used these targeted promotional strategies to generate millions in NPV and re-branding effort was deemed a success. Via the Test & Learn approach, the manufacturer realized $4.1M in estimated impact on the rollout.
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