Here's a look at how market basket analysis can assist in identifying consumer behavior trends, both expected and unexpected.
Applying Advanced Retail Analytics: Marketing Planning And Performance
Let's take a look at how applying advanced retail analytics benefits you by optimizing marketing and promotional performance and helping you look ahead.
Applying advanced retail analytics is more necessary than ever in the retail industry to achieve a more holistic view of your sales performance. Unfortunately, many analytics solutions available in the market today provide too many generalities and not enough detail. This lack of visibility can have a significant impact on business decisions in today's retail environment.
As you try to keep up with competition in your retail market or region, do you have the tools to understand the details about your business? Even if you keep on top of the basics such as store operations, category management and supply chain performance, many details exist in these areas that you could perhaps be overlooking.
Retailers that provide access to detailed business performance to their supplier community enable a much more collaborative and effective approach to solving business problems and maximizing sales and profits for both trading partners.
Two areas to focus on when applying advanced retail analytics is promotional planning and promotional performance. Let's take a look at how this benefits you by eliminating assumptions and helping you apply fact-based adjustments to optimize future promotional activity.
Studying the metrics of your promotional efforts is an absolute must to prevent any wasted resources or funding in your marketing efforts. The money and time you put into promoting your products can't just run on second-guesses and overly general information. Without knowing the truth about how well you promote, trial and error can become costly lessons on. You need a marketing agency to help maximize your marketing dollars through crafting branded promotional and marketing strategies needed to deliver profitable customer acquisition.
When you find software with promotional planning analytics, you can get down to the core of what is working now and how to improve when planning the next round. You can plan your promotions based on last quarter's results rather than having to go by last year's numbers, providing a much more accurate projection.
This works through real-time analytics giving you more immediate reports on what's occurring and where. You should start with your baseline sales and determine how well certain products sold compared to benchmarks you have set in the past. Knowing this helps you adjust your promotional campaign based on the sales of certain items over others in your inventory.
Preventing Future Mistakes
Next, analyze promoted lift sales to see what you did right the first time to prevent making future mistakes. The easy route is to do exactly what you did last year, and is extremely common amongst retailers. It's better to answer which promotions and marketing programs were successful and should be repeated, and which should be removed from your plan altogether.
Don't forget to analyze the impact of the average retail price you set and how it affected item velocity. Using this data, you'll stay ahead of your competitors in strategically pricing your products. It's also important to know how much inventory you will need to plan for your promotional planning and marketing programs. With insights and analytics, you'll see what the increased demand is projected to be and what inventory you'll need to have on hand.
The best analytics software even gives you quick summaries showing performance vs. total category.
You don't want to have to wait weeks or even months to find out how well your promotional campaign went. Once again, real-time technology is at the forefront when evaluating quality analytics platforms. When you have this type of access to data, you'll see the results of a promotional effort you began implementing just a day or two earlier.
Through a feature like promotional scorecards, you get an easy-to-read method of how things are going without having to puzzle over complex reports. Scorecards also make it easy to share among your company staff when you can't meet in person.
More so, it's easily accessible through any device since everything gets stored in the cloud. This means that through an enhanced level of communication, your suppliers can see how well you're doing - which can help build greater alignment on objectives for promotional performance.
The key metrics to look out for in promotional performance include sales based on promotion, incremental lift, incremental sales, and promotional ROI. With the latter, you'll have all the metrics you need to optimize future promotional plans and spend trade dollars where they will make the most impact.
The Factor of Real Time Analytics
There's also an important factor to consider in timeliness. How relevant and updated is the information you're looking at? If you are discussing a promotion's performance from last week, you are going to achieve a much higher relevance than when discussing something from last year, last quarter, or even last month.
By having real time discussions about what is and is not working, how well you understand promotions (your "promotional IQ") is being enhanced in real time as well. You'll be able to drive better decisions in your planning of upcoming promotions.
Tomorrow's promotional decisions should be based on today's analytics, not last year's historicals. Retailers, suppliers and distributors can all share this benefit with advanced analytics tools.
Contact us at iControl to learn about our own SaaS software giving you superior analytics for everything related to retail promotional planning and evaluation.