Promo and Price Optimization

A midsized US retailer optimizes chain-wide pricing and promotional efforts

Client profile

Client
Midsized US Retailer

Products
Promotional Item Selection and Price Mix Optimization

Industry
Grocery

Location
United States

A midsized retailer based in central United States with over 90 stores across the region leverages Daisy’s Promotional Item Selection and Price Mix Optimization solutions to optimize chain-wide pricing and promotional efforts.

The challenge

Most grocers have, until recently, made promotional decisions based on three things: the amount of vendor marketing fees available, history and tradition, and “gut instinct”. These approaches are understandable given the dynamic relationships between products and customers, in addition to the effects of pricing and promotions. It is humanly impossible to understand and leverage all this data.

Our solution

The retailer decided to deploy AI to improve and optimize its chain-wide pricing and promotional efforts. Citing the weekly print circular as its largest advertising expense, the company looked to Daisy to help analyze its data to review the products to feature in its circulars.
Promotion decisions are complicated by the Halo Effect, which includes Halo sales, cannibalization, and forward buying. For example, promoting “Brand A” of soda may boost the sales of related products, such as salty snacks. But it’s also likely to cannibalize “Brand B” soda sales that week and probably next week’s “Brand A” soda sales due to forward buying.
With Daisy’s help, the retailer analyzed years of transaction data and simulated a mix of previously known, new, and untested actions to find the optimal promo product and pricing mix. This allowed them to determine an optimized promo product and price mix that would achieve the best long-term outcome.

Results:

Daisy’s AI platform enabled the retailer's merchandising and marketing personnel to rapidly analyze transaction data on a massive scale and simulate potential strategies, ultimately “supercharging” the process by which the company makes promotional planning and pricing decisions.

2.9% Topline Sales Growth
By working with Daisy to optimize their chain-wide pricing and promotional efforts, the retailer grew topline sales by 2.9%.
Testimonials

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