Optimising promotional effectiveness in retail

How Arla outperformed a challenging dairy market by improving forecasting

To thrive in consumer retail, we need to be able to predict with precision how different promotions will perform in terms of volume and value - next month, next quarter, next year. Having Ebiquity's PlanIT available to all my team all of the time adds a super-reliable planning tool to our promotional armoury. It's like having a trusted adviser available 24/7/365.

Helen Dargue
Shopper Marketing Controller at
Arla Foods UK

Practice & Location

Ebiquity Analytics
Office: London

Objective

The dairy products market has been incredibly challenging in recent years. The costs of production and raw materials have been volatile, rising quickly from historic lows thanks to rapidly-increasing global demand. The uncertainty of Brexit has created extra pressure in the UK market.

This led Arla Foods - the market leader in branded dairy products in the UK, and a long-term customer of Ebiquity's Analytics practice - to seek out an agile, self-driven, software solution to help optimise promotional effectiveness in retail. Arla wanted to be able to understand the impact of multiple different promotional strategies on both volume and value.

Approach

Over the past dozen years, the Ebiquity Analytics team has developed market-leading expertise in the dynamics and levers of promotional effectiveness in consumer retail marketing. Our award-winning econometricians have developed a best-in-class forecasting tool, PlanIT, which enables shopper investment teams to model how any combination of promotions and base price movements in retail affect sales, margin, and profit. PlanIT allows brands to run multiple scenarios, quickly and iteratively, and to build a comprehensive world view at the level of individual products, SKUs, and retailers. In this way, they can develop and select the optimal promotional strategy.

Until recently, we provided PlanIT to our customers as an offline tool that we often operated on their behalf. Because of its popularity offline, we enhanced its processing power, made it faster, added new and improved features, and made it available as a web-based platform for brand and marketing teams to use themselves. Arla Foods UK have been pioneers in using PlanIT - with our support - to achieve targets and optimise profitability.

Outcomes

Arla's UK shopper investment team now uses PlanIT routinely to model the promotional scenarios that drive their investment decisions. The projections developed using our tool have elevated shopper investment to board level, and both the CEO and Director of Marketing regularly assess recommendations made using it. It has become one of the primary forecasting and decision-making tools for shopper investment decisions for the company.

After years battling against a challenging market, teams across Arla now have the ability to identify quickly the most appropriate promotional strategies to deliver against business objectives. PlanIT also serves as institutional memory, being a central repository of all promotional and sales data. This allows brands to learn from what's worked - and what hasn't - historically.

Optimised both volume and value performance across product portfolio

Elevated promotional effectiveness to the board level

Mitigated market volatility and raw material cost increase

Outperformed both branded and private label market

Project & Process

Implemented online promotional effectiveness product suite, PlanIT

Tested multiple scenarios for promotions in minutes

Forecasted at level of retailers and product SKUs

Provided access to all brand and shopper marketing teams