The Business Challenge
How can you determine which promotions are generating the greatest returns? That's the question our client, which runs a wide variety of in-store promotions for its brands, wanted answered. They wanted to quantify the impact of their promotional activities to identify the most effective promotional strategies for its brands.
Fractal Analytics' team of consultants recommended control store testing to identify pairs of stores that behaved similarly in all respects, including revenues, volume, size, population demographics, etc. We then ran different promotional activities in one store in each pair such as pallets, in-store TV, promotion walls and end-cap displays.
Next, our analysts recorded pre-promotion revenues and compared them to post-promotion revenues, which created an impact analysis list.
Then, we discovered that certain activities had significantly higher impact than others. For example, the incremental sales increase when supported by in-store TV commercials was 20% higher than the sales increase with pallets of products or an end-cap display.
We were able to quantify the actual impacts by incremental sales, which varied from 10% to 30% for different activities. Based on the results of impact analysis, we were able to recommend the most effective promotion vehicle for increasing our client's sales.
The impact analysis of various promotional activities
"We were extremely surprised to learn that in-store TV yielded the highest promotional sales," said the client marketing manager, "versus pallets, promotional walls and end-cap displays."