Impact Study
Detailresult B.V. (DRG) is a shared logistics and back-office service provider for two major Dutch supermarket chains serving over 2 million customers in more than 220 stores.
Challenge
Designing and executing retail promotions in the highly competitive and price sensitive FMCG retail space presents a set of unique interrelated challenges. Understanding the bottom-line impact of promotions is key to developing innovative, win-win offers that attract and retain customers while maintaining margins. Effective execution requires robust inventory optimization in every store to avoid overstock (waste) and understock (unhappy customers). Improving visibility and insight into these complex and dynamic interactions delivers more effective and profitable promotions. And it enables stronger and more productive supplier relationships through better-informed, data-driven negotiations.
Solution
We worked with DRG to develop an AI-driven promotion optimization platform to support retail promotions in four key areas:
Planning: A detailed playbook with guidelines for successful promotions, covering do’s and don’ts around discount pricing, placement, media coverage etc.
Feature optimization: A continuous optimization of future promotions, enabled by AI algorithms which keep on learning based on realizations and human feedback.
Execution: Detailed insight in expected demand per promotion is linked back to operational systems to ensure the right stock in every store.
Supplier negotiations: Providing input for fact-based negotiations with suppliers to create win-win-win promotions.
Outcome
The promotion optimization platform established a positive feedback loop to optimize promotional activity and investment. Continuous refinement over time has delivered a 30% annual increase in margins on promotional sales. Improved strategy and execution are enabled by continuous analysis at scale, also feeding into better informed supplier negotiations. Insight in expected promotional sales, substitution and hoarding effects are used to improve inventory management in every single store.
Impact stats
100,000+
Promotions improved
Weekly more than 100 planned promotions are evaluated and improved based on expected ROI insights.
10
Promotional effects
We enable granular insight into the underlying drivers and real impact of 10 promotional effects, both direct and indirect.
30%
Increased margin
Continuous refinement has delivered a 30% annual increase in margin on promotional sales.
“We have set-up procedures to optimize our promotion management process, together with Rewire. We have stopped throwing money and energy into irrelevant efforts, and have seen major improvements in our promotion results.
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