Page 177 - DMGT554_RETAIL_BUYING

Retail Buying

Notes Self Assessment

Fill in the blanks:
16. Negotiating a ....................... can often be more critical than negotiating an individual sale.
17. The negotiation process has become a more important sector in the ....................... process
as companies look to reduce their expenditure whilst increasing their purchasing power.
18. Non-government purchasing departments continue to offer a range of prequalified vendors
a ....................... for items or services that it wishes to purchase.



Case Study Aisle Redesign
A traffic to the center of the store.
major North American grocer was evaluating a beverage aisle designed to drive

1. Initial analysis indicated a slight sales lift but not enough to pay back the cost of the
program.
2. APT automated de-averaging revealed that the program caused initial disruption to
sales, followed by a larger long-term sales lift than previously observed; in addition,
APT identified a shift toward higher-margin premium products.
3. APT segmentation analysis was used to identify the most profitable variation of the
program, as well as the types of stores where it would generate the most profit.
4. The optimized rollout generated millions of dollars in incremental profit for the
grocery retailer.
The Company
A major North American grocer with 500+ stores
The Challenge

Preliminary analysis at a major grocer with over 500 locations showed that the aisle
feature slightly increased beverage sales, but the results were not compelling enough to
drive a clear decision.
The initiative presented two opportunities for optimization. Firstly, the program came in
four variations – “Gold,” “Silver,” “Bronze,” and “Simplified Bronze,” and the grocer
wanted to know which of the four program variants drove the highest sales increase.
Secondly, the grocer wanted to identify the demographic segments most likely to respond
positively to the feature. The grocer used APT Test & Learn™ software to perform a
detailed analysis, and identify winning characteristics to be used in a targeting model.

The Solution
Using APT’s Merchandise Optimization solution, the grocer was able to automatically
track the performance of stores undergoing the redesign and compare it to the performance
of well-matched control stores during the five months since the aisles had been changed.
In part, the APT software reinforced the results that the grocer had already seen. Although
beverage sales were nominally higher in test stores, the increase was minor compared
Contd...

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