Boosting the performance of coupons in retail

Context & Objectives

A leading player in the retail industry wanted to understand and boost the performance of its promotional campaigns based on various couponing initiatives.

The challenge in this type of analysis is to understand whether it is actually the coupon having an impact on sales: other factors come into play, some of which are easily measurable (competitors' prices) some less so (fashion and other macro trends).

Approach

First, we gathered and cleaned the data on sales and couponing initiatives (activation period, type of store, face value, presence of other promotions...)

We then analysed the impact of each variable on coupon campaign success and extracted the key insights. E.g.: “What category of product works best in which chain?” “Does the volume of coupons really matter?” “Where should a campaign focus its effort?

Finally, we built a model with the most relevant variables to predict any coupons campaign success and its impact on sales.

Results

In a matter of days, we helped our client improve its understanding of the critical success factors of its couponing campaigns.

  • We developed a model and a methodology that helped determine the optimal coupon on variables such as size, period and geography.

  • We also delivered an automation roadmap to enrich and industrialise the models in the existing systems.