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2013 was the first full year that this client had access to the rich trade promotion intelligence residing in the T-Pro Analytics SaaS platform. In prior years the analytic team responsible for evaluating promotion efficiency and effectiveness only could analyze the top 5 customers nationally, due to the manual intensiveness of compiling the different silos of business intelligence.
T-Pro provided real-time access to shipment, spending, accurate COG’s and POS data (both client / competitive) for 125 customers, representing 85% of their annual volume / profit. Tightly integrated intelligence silos in T-Pro resulted in moving from an average of -17% ROI on the annual trade spend in 2011 and 2012, to breakeven ROI in 2013 resulting in a $1.2mm profit increase to the company.
This client was not seeing a return on investment with a $1.99 temporary price reduction (TPR) at a specific retailer because they were unable to accurately predict volume and pricing.
T-Pro’s Master Calendar function revealed a minimal return at this price. T-Pro’s predictive analytic capability showed that the incremental volume would not be materially different at $2.19 compared to the current $1.99 retail. Running 4 of these events per year vs. the $1.99 price resulted in 90% of the incremental volume and increased incremental profit per event by $5,500. The client utilized this rich real-time intelligence to present a collaborative solution that recommended running 6 of these $2.19 TPR’s per year thus resulting a win-win solution for both trading partners. The client realized an incremental $33,000 in profit while generating a 7% incremental volume increase. The retailer’s profit increased by $21,000 while maintaining their annual category volume.
A top 5 retailer for this client hybrid EDLP program was analyzed utilizing T-Pro analytics. A review of the manufacturer’s retail strategy with this customer was warranted to ensure efficient trade investment was being achieved.
The analysis demonstrated that a 10% decrease in the EDLP price point for this brand with no additional allowance and an incremental promotion investment, projected $1,000,000+ in incremental annual dollar revenue and returned an additional $150,000 in gross profit. The retailer’s gross margin % decreased slightly on this brand, but increased category revenue over $500,000 and category profit $50,000.