SITUATION

A leading West Coast thrift retailer with $350M in revenue faced a critical need to optimize its promotional and marketing spending to support its growth plan.

Despite experiencing double-digit growth via acquisitions, the client lacked foundational analytics to evaluate pricing strategies and digital marketing effectiveness, posing a risk to their anticipated revenue targets.

A prominent thrift retailer on the West Coast, generating $350M in annual revenue, primarily relied on in-store sales. The retailer had been enjoying robust growth, mainly fueled by strategic acquisitions. However, the company faced a looming challenge: optimizing the 20-30% of its revenue spent on promotions and marketing to ensure these expenditures yielded better returns.

ACTION

We implemented comprehensive analytical models to guide strategic couponing, promotional bundling, and shopper profiling.

We also developed a custom analytics dashboard to facilitate ongoing optimization of pricing and marketing strategies.

We initiated a series of strategic actions to address these challenges and build a robust analytical foundation. First, we developed precise price elasticity models to guide strategic couponing and promotion structuring across various product categories. These models enabled the retailer to optimize promotions for increased sales and profit margins.

We then conducted market basket and affinity analyses to inform promotional bundling strategies and identify cross-selling opportunities. These analyses provided insights into which products were frequently purchased together, allowing for more effective promotion of bundled deals.

OBSTACLES

The client faced significant challenges in quantifying the financial impact of their marketing expenditures and understanding price sensitivities and customer behaviors.

Disconnected transactional data complicated promotional analytics, making it difficult to derive actionable insights.

One of the client's significant hurdles was the difficulty in quantifying the financial impact of their marketing and promotional investments. This lack of clarity impeded the ability to make informed decisions about where to allocate resources for maximum return on investment.

RESULTS

We identified $80M in growth opportunities, reallocated marketing budgets for enhanced effectiveness, and established advanced analytics for informed strategic decisions, positioning the retailer for sustained growth.

Our comprehensive analytical approach yielded significant results. We identified $80M in growth opportunities, 60% of which potential stemmed from refined promotional and marketing strategies. By reallocating the marketing budget towards high-efficiency, low-saturation channels, we substantially enhanced the effectiveness of the client's marketing spend.

The establishment of advanced analytics empowered the client to make more informed strategic decisions regarding Revenue Growth Management.