Increasing Promotions Effectiveness with Promotional Performance Analysis

How Promotional Performance Analysis helps retailers consistently generate greater promotional results

Promotions are a potent tool for generating profit lift.

But promotions are also systematically hard, inherently risky, and time and resource intensive. And with the rapid and profound changes that have occurred over the past few years in the retail industry, promotions that recently worked may already be ineffective.

Now more than ever, retailers need precise promotions measurements that can give clarity into how consumers are reacting to promotions and the confidence to make better moves going forward.

Enter Promotional Performance Analysis (PPA), a powerful analytical service offered by Revionics as part of the Promotions Optimization Intelligence Suite that provides pricers visibility into which promotions are working and which aren’t and insights into which pricing moves to make next.

What is Promotional Performance Analysis?

PPA offers a holistic view of your promotional components to assess the efficacy of a promotion. PPA goes beyond units sold and direct profits to truly determine the full impact of your promotion, including cannibalization, halo / affinity, vendor fund utilization and more.

As a fundamental piece of the promotion optimization journey, PPA helps retailers understand which promotions are producing the best results, which can be adjusted for better results, and which to eliminate altogether through intuitive dashboards and full visualization of historical promotions.

What are the benefits of PPA for retailers?

Promotions are complex, and in order to meet the demands of today’s omnichannel shopper, they will continue to get more complex. This means they will only get more difficult to accurately measure without robust analytics. PPA takes promotions out of the dark and provides retailers with a powerful understanding of the impacts of their offers so they can more confidently shape an effective promotional strategy.

In practical terms, in the short term, a retailer can immediately eliminate ineffective promotions or adjust underperforming promotions for improved results. For example, in a recent analysis, we helped a client identify that only 60% of their promotions made sense to keep running as is, with 26% of their promotions draining profits and revenue past the point of viability.

In today’s market of labor constraints and strained margins, it’s more important than ever for retailers to get the most out of every price change or every promotional offer. Simply eliminating underperforming promotions can save significant amounts of labor resources and lost profits.

In the long term, retailers can make analytically sound promotional decisions that drive win-win scenarios for the retailer and the shopper. Better promotions help retailers differentiate from competitors, attract consumers to their stores and meet financial objectives.

PPA is a great step to take toward becoming a data-led organization. The solid analytical data also helps with adoption and change management as you make adjustments to your promotions processes and operations.

Running a PPA can help level up your relationship with your vendors too, giving you more leverage to negotiate better allocations of vendor funds or lower cost increases while helping them earn better returns on their investments.

Done well, PPA will unlock a virtuous cycle in which retailers, consumers and vendors all win.

Promotions optimization is a journey

Conducting a PPA is just one stage of the journey toward optimizing your promotions. While the results of this in-depth analysis can provide you with countless valuable insights into your promotions strategies, turning those insights into actions that achieve the best results is a whole other challenge.

That’s where a promotions optimization solution comes in, and why PPA is offered as part of our Promotions Optimization Intelligence Suite. The findings from your PPA provide the foundation and strategic direction for leveraging a promotions optimization solution to its full advantage.

And even if you’ve already been using a promotions tool for a while now, a fresh PPA can guide you to further fine-tune your promotions strategies to best support financial goals and consumer engagement, especially after experiencing major market changes.

Your partner for the journey

At Revionics, we’ve helped major retailers around the world unlock invaluable insights through PPA and promotions intelligence. With more than 20 years of AI learning and retail expertise, our robust science and accurate models lead the market for promotions optimization.

On top of that, we’re constantly innovating our science to ensure our customers can stay ahead of the pace of retail. Our newly released Promotions Planning and Optimization solution was built around our leading-edge, scalable AI platform to handle increasing complexity and enable personalized, inventory-aware omnichannel promotions for today’s sophisticated shopper.

To learn more about PPA and our new promotions optimization tool, reach out to our team of pricing experts today.