A large convenience retailer wanted to develop a holistic understanding of promotions – not just sales effectiveness and profitability but also their impact on basket size, product-specific trips and overall total store trips. Traditional data and modeling methods allow only for assessing the impact on sales.
IRI partnered with the retailer to build a sales and causal drivers database, leveraging individual transaction data. A store-specific promotional event database, including “continuous” promotions and “strict” multiples, pushed IRI to design novel approaches to assessing promotion impacts. IRI found that the impact on basket size was more moderate compared to the impact on volume and dollar sales, even for popular and attractive promotions. And, while promotions drove product-specific trips, they didn’t always contribute to “incremental” trips to the store (multiple promotional items in the same basket). Promotions backed by marketing and external displays, and those tied to new product launches, were more effective in driving traffic to the store.
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