Expand Margin

Competitive dynamics in today’s environment, with increased online penetration, place more pressure on margins than ever before. Many offers are generated with unnecessary discounts and markdown levels and “colliding” promotions. BRG Retail professionals have developed a proprietary analytical approach at the transaction level to identify and quantify opportunities to improve top-line performance and expand gross margin.

Current Retail Challenges

In today’s environment, retailers face more pressure on margins than ever before; promotions are required to drive in-store and website traffic. Companies are challenged in going to market as an omnichannel retailer, with distinct internal teams such as Marketing, Customer Loyalty, Retention, Buying, Planning, and Direct to Consumer developing compelling offers to entice customers and push them to convert and drive sales.

Customers are being bombarded—through mail, email, and mobile devices—with coupons, special offers, advertised discounts, clearance offerings, and—when inside a store—unadvertised in-store specials or appeasement offerings at checkout. In many cases, these various offers are generated in isolation, individually crafted with limited historical data or visibility to identify conflicts and opportunity for refinement. Frequently, promotional offers are generated separately, without a robust, corporatewide coordination of the net impact to revenue and margin.

BRG’s proven analytics approach drives new and deeper understanding of business performance so decisions can be made, and resources allocated to focus on key drivers of value while de-emphasizing value destroyers.

Discount Stacking – Categorize competing promotional vehicles – Delayer collision of discount stacking – Identify required coupon controls – Layering of online vs. in-store sales promotions
Clearance and Markdowns – Optimize seasonal clearance and markdown discipline – Improve obsolete inventory management – Create a specified cadence for markdowns/clearance
Marketing Touch Frequency – Outline potential marketing touch improvements and tactics – Loyalty program discount optimization
Discount Thresholds vs. Sales Lift – Set thresholds on merchandising discounts in relation to sales – Estimate impact of discount on price, units sold, revenue, and GM%

BRG Approach

Quantifying impacts of promotions, pricing decisions, and markdown management channels is important to manage sales and margin from the buyers’ view and associated views across product categories. BRG has developed a proprietary data analysis approach with a quantifiable assessment that reaches the transaction-level data (TLOG) to identify and quantify the collision of discounts and help companies improve their top-line and margin.

Our approach assesses and analyzes quantification of unintended discount stacking, impact of customer satisfaction discounts taken at point-of-sale, impact of unadvertised discounts, performance by type of promotion, identification of loyalty program “cherry pickers,” effectiveness of traffic drivers, benefits of customer loyalty program, potential improvements to promotional desktop tools, and markdown effectiveness.