Improving In-Store Fixtures
A leading specialty retailer optimizes roll-out of a new in-store sales kiosk
The Company
One of the most sophisticated data-driven specialty retailers in the world with a well-known and respected brand, and 1500 mall-based locations.
The Challenge
The client had developed a new offering, an in-store sales kiosk, which it tested in roughly 75 of their stores. Feedback from the field was mixed — some store managers reported very positive customer reaction, while others were unimpressed. The retailer could not analytically identify any significant gain in sales in the stores where it had tested this offering. Since executives could not identify a sales increase to justify the investment, they decided to abandon plans to further roll out the kiosks.
Before doing so, the company used the APT Suite to re-examine the program to make sure that abandoning it was the right decision.
The Solution
The client began by using the APT Suite to isolate the impact of this kiosk on total store sales and profit, excluding all of the other factors that influenced performance during the test period. The APT Suite automatically:
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Targeted a matched control group;
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Adjusted for seasonality patterns, weather-driven effects during the test period, and underlying long-term growth patterns by store; and
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Identified outlier data points in order to develop a more accurate measurement of sales and profit lift.
In doing so, the client was able to get an accurate, comprehensive measurement of the actual impact of this new concept on store performance. APT's analysis determined that the kiosks, on average, had a small positive impact on sales and profits, but that this lift was not sufficient to justify the cost of the kiosks overall.
Most importantly, the APT Suite automatically went beyond this aggregate analysis to look at each
specific store. This process identified some stores that had experienced tremendous gains when the concept was introduced and other stores where the kiosks were destroying value. The APT Suite
automatically identified and quantified the factors that predicted where this concept was likely to
succeed. Using this data, the client was able to identify a group of several hundred
targeted stores where introduction of the kiosks would generate positive returns.
Results
The company rolled out the concept to the targeted store group. Retrospective measurements of profit gain from this action were an increase in net profit of $1 million per year.
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