Solutions by Industry

Retailer-Supplier Collaboration: A Case Study

A leading manufacturer looked to work with a retail partner to test and evaluate a new merchandising display.

  • Previous efforts at collaboration had suffered from a lack of transparency in test design and analysis.
  • APT's Test & Learn for Stores™ provided a platform upon which both trading partners could confidently understand the impact of the test.
  • Using APT, the partners identified that the displays had a positive impact for both the manufacturer's portfolio and the retailer's category in some, but not all, cases.
  • Rollout opportunities were identified to maximize the program's impact, targeting stores where the trade-up from lower margin to higher margin goods was the strongest.
The Company

A leading nationwide consumer products company selling products through tens of thousands of doors

The Challenge

Consumer research conducted by the manufacturer indicated that a new display would potentially make it easier for consumers to shop the category.  The company wanted to test the new display with one of their retail trading partners in order to determine how long it would take for an investment in the displays to pay back.  Past efforts at collaborative in-store testing with a number of retailers had been hampered by a high degree of skepticism regarding the manufacturer's findings. The company and one of its leading retail partners looked to APT's Test & Learn for Stores™ to provide objectivity and transparency to the design of the test and the execution of the analysis.

The Solution

Using APT’s Test & Learn for Stores™, the retailer and the manufacturer worked jointly to design a test that gave both partners confidence that reliable, objective, and actionable results would be obtained.  Test stores were selected to be representative of the retailer’s broader chain and well distributed across key demographic and competitive characteristics.  An appropriate control group was identified to isolate the unique impact of the new display on the manufacturer’s brands and portfolio, as well as the retailer’s overall category, taking into account all halo and cannibalization effects.

Once the impact of the new display had been quantified at all relevant levels of the product hierarchy, further analysis revealed that the display was more effective in stores with a younger demographic and in trade areas where the retailer faced heavier competition.  APT’s user-friendly workflow facilitated the process of building an accurate predictive model which identified the gross margin lift, on a store-by-store basis, that could be expected if the display was rolled out to each location in the retailer's network.

The Results

The manufacturer and retailer used this analysis to target the new display only to stores where the new display would pay back within one year.  In addition, the manufacturer and retailer established greater trust through the transparency provided by the Test & Learn™ approach from test design to final insights.