Leading Retailer Empowers Fact-Based Merchandise and Promotions Planning Decisions

Problem

A major retailer in the U.S. sought to enhance its merchandise planning and promotion strategies by utilizing advanced analytics. Facing increasing competition in the retail market, along with evolving consumer behaviors and pricing pressures, the company recognized the need for improved decision-making tools.

One of the key challenges was that each category manager was managing sales planning and supplier evaluation independently, often using their own spreadsheets and processes. This decentralized approach created inefficiencies and missed opportunities for more holistic planning and cost management. The company saw potential in creating a unified system that could better support decision-making across the entire organization.

Solution

To address these challenges, the retailer’s analytics team developed a comprehensive process for sales planning and cost management. This system integrated internal data with third-party syndicated information, offering a detailed historical analysis of performance. Additionally, it employed prescriptive analytics to navigate the complexities of the various variables involved in merchandise planning.

The optimization platform they created provided a consistent framework for category managers across multiple departments, enabling them to:

• Conduct negotiations with suppliers based on data-driven insights, helping to align with top-line revenue and product assortment goals.
• Assess supplier performance and funding comprehensively, ensuring that all aspects of the business were taken into account and their impacts fully understood.
• Standardize the planning process across departments, improving efficiency and consistency.

Results

The new system brought a range of benefits to the retailer’s sales planning and category management team. By providing greater visibility into costs and customer preferences, the team gained deeper insights to make more informed decisions on pricing, promotions, and product assortments. This ensured that the product range better reflected consumer demand, leading to improved sales performance.

Some of the key results include:

• A substantial return on investment (ROI) due to more efficient planning and resource allocation.
• The creation of a collaborative environment where suppliers could engage in joint sales planning, improving communication and outcomes.
• Enhanced use of trade funds, leading to more strategic promotions and better cost management.

Overall, the integration of analytics into the company’s planning processes enabled them to navigate the complexities of modern retail more effectively, making data-driven decisions that led to better performance and competitive advantage.