Value shoppers have become a fixture in the retail world. Naturally, promotions are becoming increasingly prominent – yet promotional strategies carry significant risk. By failing to set the appropriate pricing structure for a promotion, a retailer could drive millions of gross margin dollars into the ground. On the flip side, losing sales or gross margin dollars on an individual item may be the right strategy if a promotion drives significant increases in total store traffic and sales.

The complexity of basket-level analysis has long prevented retailers from fully utilizing it to evaluate and optimize their promotional strategies. But as technology develops, new solutions are enabling retailers to analyze large volumes of transaction- and customer-level sales data both rapidly and accurately, ultimately putting basket-level insights at the fingertips of decision-makers company-wide. With these new solutions, retailers can now get data-driven answers to questions such as:

• Which products should be promoted?

• Which products should get most prominent placement in the ad?

• What structure should the offer take (e.g., “BOGO” vs. ”25% off” vs. “spend $200, get $20 back”)?

• How deep of a discount should be offered?

• What items should be placed adjacent to one another or combined in a bundled offer?

• What exclusions or limits should be placed on the promotion (e.g., “limit 2 per customer”)

• What roles do different products play?

This white paper highlights how leading retailers are answering these questions by putting basket-level insights at the fingertips of key decision-makers – and dramatically improving the ROI of their promotional investments.