Blog Post
Leading Retailer Empowers Fact-Based Merchandise and Promotions Planning Decisions with AIMMS
A prominent US retailer
One of the largest retail chains in the US was interested in leveraging advanced analytics technology to elevate its merchandise planning and promotion decisions. The company was looking to embrace new decision support tools to get a competitive edge.
Problem
This large retail chain was experiencing the effects of increasing competition in the retail space, changing consumer habits and tastes and pricing/margin pressure. In addition, each of their category managers was evaluating suppliers and conducting sales planning independently. Everyone had their own spreadsheet and tracking process. There was a tremendous opportunity to conduct planning and cost management holistically and provide enhanced analytic support for decision-making to all category managers.
Solution
The company is a leader in the adoption of data and analytics to improve operations and increase customer satisfaction in retail. Their internal analytics team decided to develop a new process for sales planning and cost management. The new process leverages internal and third-party syndicated data to get an in-depth historical view of performance. It also leverages forward-looking prescriptive analytics to help tackle the complexity of the many variables involved. The integrated optimization platform, created with AIMMS technology, is now used across dozens of categories to help the merchandising team identify the optimal scenarios in a dynamic environment. The new platform helps the team:
- Conduct fact-based negotiations with suppliers to better meet top-line and assortment targets
- Evaluate all supplier funds and performance elements
- Ensure all business factors are weighed and impacts are understood
- Manage the planning process across categories in a consistent, efficient manner
Results
The company’s sales planning and category management team now has more visibility into costs, customer trends and has enhanced insights to make better decisions about pricing, promotions and assortment. This ensures the assortment is relevant to consumer preferences. To date, the new cost management process with the new analytics support has helped realize significant Return on Investment.
Results include:
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Significant ROI
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Collaborative forum for suppliers to participate in joint sales planning
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More efficient use of trade funding
