Case Study

New Forecasting Solution Boosts Beverage Company’s Promotional Results

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Challenge

The beverage company encountered significant difficulties in sufficiently forecasting the impact of promotional decisions. The company lacked the insights to plan how far in advance to execute promotions. Their goal centered on the ability to make these forecasts six months ahead. By planning this far in advance, it helped them with key decisions such as which brands to promote, in which channels and how. This would also help with promotional investment decisions to reduce spend to maximize ROI.

The beverage company wanted a solution that reduced decision turnaround time significantly and improve forecast accuracy to improve confidence in decision making.

Now, with a new forecasting solution, the beverage company has the insight and processes it needs to make promotional planning decisions six months in advance - with a stronger, more accurate predictive lens for decision making.

Solution

Antuit built a simulator tool that could reliably predict the impact of promotional lift and give them the information it needed, when it needed it, to run multiple scenarios to maximize sales and revenue. 

This solution, which uses open source analytics and a simulator front end, conducts simulations at several levels: channel, banner, brand, SKU, week, and the intensity of the promotion. It was able to assess incremental lift and ROI to help determine the appropriate fit for the promotional execution, forecast the promotion’s impact on key metrics such as volume and revenue, and offer competitive insights.

Through a variety of analytics, it helps the operations unit estimate promotion lift impact based on various levers, such as whether the promotion involves a promotional pack, a buy-one-get-one-free offer, or a percentage price discount. The solution forecasts the baseline and all of the significant drivers of demand above that baseline to maximize promotional profitability.

With a better understanding of the most important promotional levers, the business can predict incremental revenue and volume and visualize not their only their own SKUs but also those of competitors, in addition, the solution provided a simplified report that can be shared across the organization enhancing communication of strategy and execution across key accounts.

Results

In the solution dashboard, the team can test multiple promotional levers to provide a rich variety of what-if simulation and help everyone better understand their effects on the promotional forecast. They can evaluate promotions on a week-by-week, brand-by-brand, or channel-by-channel basis, for instance, and understand how the promotional lifts can drive volume, margin, and return on investment. They can also highlight what those forecast results look like in comparison to what has been done historically. 

The business now has a wide-ranging tool to help drive strategic decisions during important promotion planning cycles, along with the ability to easily share with their cross-functional teams the valuable insights to continually improve promotion decisions with their retail partners.

In addition to the vastly enhanced promotional forecasting capabilities, the Antuit solution yielded major process improvements for the revenue operations unit. The solution is deployed on managers’ laptops, replacing a system that was almost exclusively spreadsheet-based.  The next step in advancing the utility of the solution will build in advanced capabilities for profitability predictions and the optimization of the promotional mix and intensity on a weekly basis.

 

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