Investment Plan for Commercial Store Renovation
Challenge
A clothing retail chain in Chile is planning a significant renovation of its stores to accommodate a new clothing line. Before proceeding with the renovation, an experiment is conducted to measure the impact of this investment.
Test
Each renovated store in the test group is matched with a custom-selected group of regular stores (not yet renovated).
Results
A projected 4.9% increase in sales is anticipated in the renovated stores.
Opportunities were also identified to refine the impact of the renovation by reducing some existing product lines to make room for more profitable new business lines.
Next Best Actions
The most profitable stores for initiating renovations to improve ROI have been identified.
Expanding Packaging Presentation in Cleaning Products
Challenge:
A liquid soap brand aims to assess the impact of introducing a new 150 ml presentation to its current product line, which includes 250 ml, 400 ml, and 1-liter options. The challenge is to determine whether adding this new presentation will affect the sales of existing offerings and if the new size will be well-received by consumers.
Test:
A fractional factorial design experiment was conducted to address this challenge. The experiment involved testing the four presentations (150 ml, 250 ml, 400 ml, and 1 liter) at two different price levels. Additionally, a control test was conducted on the existing product line, consisting of three sizes (250 ml, 400 ml, and 1 liter) at the same two price levels.
The experiment was carried out in a predefined group of stores over a 3-month period, and data on the sales of each presentation at each price level were collected.
Results:
The results indicated that the introduction of the 150 ml presentation did not have a negative impact on the sales of existing presentations. Furthermore, it proved to be popular among younger consumers in specific geographic areas.
Next Best Actions:
The liquid soap brand decided to expand its product line to include the 150 ml presentation based on the positive findings. Additional experiments were conducted to fine-tune the pricing and product offerings for the existing products, aiming to maximize both sales and profitability.
Collaboration in On-Site Campaigns between a Manufacturing Company and Retail Chains
Challenge
A cookie manufacturing company collaborates with its retail partners to design an experiment aimed at evaluating the effects of placing promotional islands (retail fixtures) in their stores to enhance the performance of a specific category and its relative market share. These promotional islands are dedicated to a specific brand and a particular product line (specialty cookies).
The objectives are to determine::
- If it is beneficial for the cookie brand and to what extent.
- Whether it helps improve the overall category metrics (cookies – all other brands within the retail partner).
- Whether it boosts sales of the specific cookies while potentially cannibalizing the performance of others.
Test
A cost-benefit experiment is designed to assess the impact of adding these brand-specific promotional islands in select stores. The performance of each store that received the promotion is compared to a group of similar stores that did not receive the promotion.
Results
Significant increases in sales of the promoted cookies were observed, with a minor decrease in the performance of other brands.
Overall, there was an improvement in the performance of the entire category.
These promotions performed better in specific stores due to their geographical location, larger store size, and a younger customer demographic.
Next Best Actions
Based on these findings, the manufacturer strengthened its relationship with the retail partners.
Better-tailored promotions were designed, taking into account the experiment’s results and identified drivers (merchandising, marketing, trade spend, retail servicing).
