Post on 02-Oct-2020
Leveraging Loyalty Card Data to Improve
Trade Promotion Effectiveness
Megan R. Margraff
Chief Analytic Officer – Spire, LLC
Objectives
• Show how loyalty card data can be
used to drive shopper-based trade
insights and more effective trade plans
Agenda
• Background
– About the Data Source
– Putting the Shopper at the Center of Trade
Planning
• Case Studies
– Live blinded examples of analysis, insights,
and trade plan implications
• Discussion
About the Data Source
The Spire Shopper Panel
Essence /Engagement Segmentation™
Store Level & Store Cluster
Access
Demographically Representative
Sourced from 30mm Loyalty
Card Households 15 Banners
Largest blended retailer composite loyalty card data
Mix of retail formats and strategies Actual purchase history Reporting at levels most others cannot
Shopper segmentation to evaluate sales
Group shoppers by behavior, purchase history or differences
Benefits
Total transaction perspective Compare fresh & center-store Detail on day/time of purchase &
method of payment
Uniquely connect behavior & attitudes Via surveys to HHs in our panel then link
actual behavior
Execution
Shopper Analytics and Consulting Services
Loyalty Card Data Access
Shopper Activation
Custom Analytics
Shopper Intelligence Portfolio
Behavior-Based Segmentation
Aggregate Shopper Intelligence Platform
Retailer Banner Level Shopper Intelligence Platform
Spire offers a variety of shopper insight
solutions
Spire’s Shopper Intelligence
portfolio includes
comprehensive analysis of the
shopper behavior impact of a
variety of levers:
-Trade
-Shopper Marketing
-Consumer Promotion
-CRM, etc.
Putting the Shopper at
the Center of Trade
Planning
Traditional trade promotion analysis leverages
two to three data sources
Volumetric
Data 0
100 200 300 400 500
Un
its
Baseline Sales Incremental Sales
F&D
2/$3
FO
$1.79
F&D
10/$10 Causal Data
Financial
Data
Cost: $100K
ROI: $0.75
Cost: $75K
ROI: $1.05
Cost: $250K
ROI: $0.88
…but traditional trade promotion analysis leaves
critical shopper-based questions unanswered
Volumetric
Data 0
100 200 300 400 500
Un
its
Baseline Sales Incremental Sales
F&D
2/$3
FO
$1.79
F&D
10/$10
Who is
buying
on deal? % Buyers
Heavy
Medium
Light
New
% Buyers
Heavy
Medium
Light
New
% Buyers
Heavy
Medium
Light
New
Causal Data
Traditional analysis leaves many shopper
based questions unanswered…
Volumetric
& Causal
Data 0
100 200 300 400 500
Un
its
Baseline Sales Incremental Sales
F&D
2/$3
FO
$1.79
F&D
10/$10
How do
promotions
affect purchase
behavior during
the deal?
Average Purchase Size on Deal
1.5 units 1 unit 6 units
Traditional analysis leaves many shopper
based questions unanswered…
Volumetric
& Causal
Data 0
100 200 300 400 500
Un
its
Baseline Sales Incremental Sales
F&D
2/$3
FO
$1.79
F&D
10/$10
How do
promotions
affect purchase
behavior after
the deal?
Baseline
goes up
after deal…
Did we drive
repeat
among new
buyers?
Baseline
stays flat
after deal…
Did we
subsidize
buyers who
would have
bought
anyway?
Baseline
goes down
after deal…
Did we
pantry load
and extend
purchase
cycles?
Putting the shopper at the center of trade planning
• Develop trade plans with a deep understanding of the shopper behavior does each type of
event drives in the short and long term
– Which trade tactics subsidize base volume by driving short term lift but not long term growth?
– Which trade tactics drive long term benefits (ex: T&R, expandable consumption, loyalty)?
– Which trade tactics drive detrimental long term shopper behavior such as deal to deal
buying?
– What is the impact of product interaction within the category in driving positive and
negative shopper behaviors?
– Do different shopper segments respond to tactics in different ways?
The Need…
Deliver a trade plan that maximizes positive shopper behaviors & limits negative behaviors
Support each recommendation with simplified shopper-based rationale: Trade Plan Do’s & Don’ts
Maximise the impact of Trade plans at the:
Brand level, Portfolio level & Category level
Category and shopper insights simplify retailer buy-in/execution
The Benefits
Case Study
Trade Intelligence Case Study
For major center of store food manufacturer with over 1200 Trade Events
Client Need
– Overall impact of current trade strategy on both short and long term volume
– Impact to shopper behavior of current trade promotions tactics
– Reduce overall trade budget with no impact to overall sales and shopper loyalty
The Solution
– Analyzed thousands of trade events at category & PPG level across 12 retailers
– Built database of individual trade events
– Identify impact of each trade tactic (i.e. multiples pricing) both short & long term
– Deliver simplified Field Sales Action plan with prioritized recommendations
Recommended approach leverages a variety of data sources
for a “from the ground up” view of trade events
Detailed Tactics Many Events
Thousands of Trade events
Multiple Client and Competitive
Promotable Product Groups
Hundreds of Unique Tactical
Combinations
12 Retail Banners
2 Years
Promoted Price, Multiple, Discount
FSI/Shopper Marketing
Timing & Frequency
Other Promoted PPGs/Brands
Season & Holiday
Varied
Data Sources Actual, Card-Based Purchase Behavior
& Pricing Detail
Syndicated Merchandising Calendars
MarketVision AdViews
Trade Planners
Phase 1
Trade Tactics
PPG
Line vs. Segment Promotion
Feature/Display Support
Promoted Price & Multiple
Duration
Timing (Season, Week of Month)
Frequency / Gaps
Promotion with other PPGs
Promotion with Key Competitors
Shopper Marketing Support
FSI Overlay
Recommended three phase approach begins with a
comprehensive database of trade events and tactics
Who buys?
How much do they buy?
What else do they buy?
Impact to purchase cycles?
Impact to trial?
Impact to switching?
Is there a post-deal trough?
Loyalty effect?
Repeat buying effect?
Category impact?
Deal-to-deal buying?
Phase 1
Trade Tactics
Phase 2
Behavior Impact
PPG
Line vs. Segment Promotion
Feature/Display Support
Promoted Price & Multiple
Duration
Timing (Season, Week of Month)
Frequency / Gaps
Promotion with other PPGs
Promotion with Key Competitors
Shopper Marketing Support
FSI Overlay
Second phase is to analyze the purchase behavior impact of
each trade event, comparing deal buyers to non-deal buyers
The behavior impact of each
event is analyzed using a test
vs. control approach,
comparing:
• Deal buyers vs.
• Non-deal buyers shopping
weeks pre/post deal in same
banner, same products
Phase 1
Trade Tactics
Phase 2
Behavior Impact
Phase 3
How Tactics Drive Behaviors
PPG
Line vs. Segment Promotion
Feature/Display Support
Promoted Price & Multiple
Duration
Timing (Season, Week of Month)
Frequency / Gaps
Promotion with other PPGs
Promotion with Key Competitors
Shopper Marketing Support
FSI Overlay
The third phase is to apply rigorous analytic techniques to
link the tactics used to the changes in behavior they drive
for each promoted product group
Who buys?
How much do they buy?
What else do they buy?
Impact to purchase cycles?
Impact to trial?
Impact to switching?
Is there a post-deal trough?
Loyalty effect?
Repeat buying effect?
Category impact?
Deal-to-deal buying?
This approach provides a consistent framework to
address a wide range of business questions
• What is the impact of promoting multiple brands within the portfolio together? Which
combinations drive trade-down vs. up-sell/variety-seeking?
• What’s the right sequence of promotions across my brand portfolio?
• Does holiday promotion drive loyalty/share of requirements throughout the year?
• What are the right tactics for holiday vs. non-holiday deals?
• How do I optimally plan trade deals and shopper marketing activities for synergy?
• How do trade deals compare to shopper marketing events in terms of long term benefits?
• Which tactics used by my competitors are harming the category? Which tactics should I
consider emulating with my brands?
Sample Business Questions
One-week deals drive incrementality, while two-week deals already begin to subsidize loyal buyers
Promote Brand A with Competitor C, but never Brand B with Competitor C
In terms of discount, go for 40% or more… or aim for efficiency. Moderate discounts are a waste
of resources, as response doesn’t justify additional spend
Using the right multiple drives strong expandable consumption for the brand and the category,
but using SUP/too-low multiples drives subsidization
Brand B isn’t getting repeat from holiday triers… but Competitor C is, thanks to stronger post-
holiday planning
Sample Insights
Short-Term Lift Long Term Lift per Buyer
826%
404%
265%
171%
F&D FO TPR RTPR
% Increase in Avg. Weekly Brand A Volume, Deal Weeks vs. Non-Deal Weeks
7.1%
2.3%
1.4%
-1.2%
F&D FO TPR RTPR
% Increase in Brand A Volume, Deal Week + 12 Weeks Post, Deal Buyers vs. Control
TPRs appear to drive moderate lift in
the short term…
…but in the long run, TPR buyers don’t end
up buying more Brand A volume than
non-deal buyers
The short-term lift on TPRs is mainly due to buyers time-shifting their
purchases, which doesn’t drive volume in the long run
Brand A
Event Type: Don’t Do TPRs or residual TPR after a quality event
Brand A
Price Point: Aim for at least a 40% discount, or target efficiency
Short-Term Lift
388% 387% 408%
752%
20-30% 30-40% 40-50% 50-60%
20-30% 30-40% 40-50% 50-60%
Short-term lift is fairly flat until you hit a key
50% discount threshold (too costly)
Long Term Lift per Buyer
-1.6%
0.0%
3.7%
7.0%
20-30% 30-40% 40-50% 50-60%
20-30% 30-40% 40-50% 50-60%
But long-term lift per buyer does start to
increase at 40% discount
Remember, the results shown above are ‘all else being equal’ – below 40%
discount, use an efficient price point at the right MULTIPLE to drive stronger
short and long term lift!
nearly 3x the lift
The major benefits of promotion are achieved in the first week of the deal, with:
Short-Term Lift Trial Impact
826%
307%
1st Week 2nd Week
% Increase in Avg. Weekly Brand A Volume, Deal Weeks vs. Non-Deal Weeks
419%
248%
1st Week 2nd Week
% Increase in New Brand A Buyers per Week, Deal Weeks vs. Non-Deal Weeks
44%
21%
1st Week 2nd Week
% Increase in Brand A Volume per Buyer, Deal Buyers vs. Control
Buy Rate Gains
over 2x the buy rate gains nearly 2x the trial gains
compared to the second week of a multi-week deal.
Brand A
Event Duration: Run 1-week Events
Expandable Consumption
13%
5%
1-Week Deal 2-Week Deal
1-Week Deal 2-Week Deal
Long Term Lift per Buyer
5.0%
-3.1%
1-Week Deal 2-Week Deal
1-Week Deal 2-Week Deal
Two-week deals deliver much less
expandable category consumption
Two-week deals drive NO long term
gains in Brand A volume per buyer
By subsidizing buyers who would have purchased anyway in the second week, multi-
week deals erase the long-term volume gains achieved in the first week of promotion
Brand A
Event Duration: DON’T DO Multi-Week Deals
For each brand, a full trade plan is developed with the shopper rationale behind each
recommendation
Use the savings from one-week events (instead of 2-week events) to drive greater frequency of promotion
Brand A deals require only a 4-5 week gap between them for best response in season. (Deals that occur <5 weeks after the last Brand A deal will generate sub-par lift.)
Event Type Feature & Display
Target minimum
75% Display ACV
Long term benefits of promotion occur in the first week, followed by subsidization
First week drives trial, loading, expandability and long term volume
Second week drives lower short term lift, and does not drive volume gains in the long term, as it subsidizes buyers who would have bought anyway
Event
Duration
1-Week Events
Multiples are critical to drive loading and expanded consumption
Single-unit and 2-for pricing miss a critical opportunity to drive loading, which leads to expanded category consumption and long term volume gains.
3-for pricing hits the sweet spot between short-term lift and long term volume gains
3/$4 works best, but if you can’t afford to hit 3/$4, use 3/$5
Discounts of at least 40-50% (3/$4) drive best short-term lift, trial, loading, expandability and long term volume
Unless you’re hitting this 40% threshold, discount doesn’t matter as much.
Price Point 3/$4 or 3/$5
Multiple of 3
Discount >40% is
best, but if you can’t
hit at least 40%, aim
for efficiency
Frequency 5-6 events per year
If you can’t get the display, target another week instead of doing a feature only event
Display is critical to driving short-term lift, reach and trial
Display also drives greater loading on deal, which leads to short-term expandable category consumption and greater long term volume lift
Other tactics analyzed include stacking with portfolio and competitive events,
timing, seasonality, and stacking with consumer/shopper marketing events
Brand A - Trade Plan Do’s
There is no benefit to single-unit pricing vs. multiples, and 2-fors are too low
Single-unit pricing does not help drive trial or buyer reach compared to multiples.
Two-for pricing and single unit pricing are too low to drive loading, expandable consumption, and long term volume gains, and subsidize heavy buyers
This is particularly important at shallower discounts: the shallower the discount, the higher the multiple needs to be to drive volume
Shallower discounts on Brand A tend to appeal more to existing Brand A buyers, vs. new/light buyers
Since many deal buyers will be existing Brand A buyers, it’s important to combine shallower discounts with higher multiples to drive volume – promoting at shallow discount with a low multiple will definitely subsidize volume
Multiples usually don’t turn away buyers, but Must-Buy multiples do
Must-buy multiples reduce deal reach and skew deals to heavy buyers
Better to pull back & re-load than to promote head-to-head with competitor or stack with Brand B
Volume impact will be significantly lower with these brands in the mix – look to other times
Event Type Don’t Do TPRs or
Residual TPR
following a quality
event
Similar to TPRs, multi-week events subsidize Brand A’s baseline sales
Second week drives lower short term lift, and does not drive volume gains in the long term, as it subsidizes buyers who would have bought anyway
Event
Duration
Don’t Run Multi-
week Events
Price Point Don’t Use Single-
unit Pricing, 2-for
Pricing, or “Must
Buy” Multiples
Portfolio &
Competitive
Impact
Don’t Promote with
competitor or Brand
B
TPRs subsidize volume you would have achieved anyway
Without feature or display support, Brand A TPRs drive small short term lift, but TPR buyers don’t actually buy more Brand A in the long run – this short term lift just time-shifts purchases that would have been made at full price!
If you can’t get quality support, don’t deal
Key “Don’t Do” recommendations are also developed
Brand A - Trade Plan Don’t Do’s
DO DON’T DO
Event Type F&D, min. 75% Display TPR or residual TPR after quality event
Price Point 3/$4 or 3/$5
Single-unit pricing or 2-for pricing
“Must Buy” multiples
4/$5
Event Duration 1-week Multi-Week
Frequency 5-6 Events per Year --
Timing First two weeks of the month --
Stacking Time deals to stack with
Shopper Marketing (any) and FSIs --
PROMOTE
BEFORE: PROMOTE WITH: UNSTACK & GAP WITH:
Portfolio &
Competitive --
Brand B Brand C
Recommendations are boiled down to simplified “Cheat Sheet” format for easy
execution and field sales reference
Brand A – Cheat Sheet
Priority Action Why? Volume
Index
1 F&D Display drives a huge impact to ST & LT volume for Brand A &
category 100
2 Unstack & Gap
w/Brand C
Big impact to ST lift on both Brand A & Brand C - highly negative
to total Client 63
3 Unstack & Gap
w/Comp X Strong impact to ST lift on Brand A 52
4 Unstack & Gap w/
Brand B Sales
Big impact to ST lift on both Brand A & Brand B - highly negative
to total Client 36
5
Five to Six 1-week
Events
Instead of Four 2-
week Events
Drives similar ST lift, stronger LT lift, and subsidizes 2 fewer weeks
of baseline volume 25
6 3/$4 or 3/$5
Stronger expandable consumption, but more subtle LT differences
vs. other price points/multiples. At anything less than a 50%
discount, the multiple matters more to volume than the discount
22
7 Stack with
Shopper Marketing
& FSIs
Moderate impact to ST and LT Brand A lift 20
8 First 2 Weeks of
Month
Better for category expandability, but moderate impact to Brand A
ST & LT lift 17
Recommendations are also prioritized based on anticipated volume (and/or profit)
impact
Brand A – Prioritized Recommendations
Sample : Shopper Marketing Synergy with Trade for Brand A
Impact to Behavior
Deals with SM Support vs.
Deals Without SM Support
Short Term Lift # New Brand
Buyers
LT Volume per
Buyer1
Loyalty2
FSIs + 71 % pts - 2 % pts + 6.5 % pts + 1.5 % pts
Shopper Marketing – Any + 96 % pts + 117 % pts + 3.6 % pts + 0.4 % pts
Targeted Marketing (Catalina)
+ 150 % pts + 191 % pts - 1.2 % pts + 1.8 % pts
Shelf Signage + 132 % pts + 122 % pts + 4.6 % pts + 1.0 % pts
POS In-Ad Support (Buy $X Get $Y Off Next Order)
- 5 % pts - 146 % pts + 16.8 % pts - 1.8 % pts
Total Category Planning
Shopper Marketing Synergy with Trade
For many Client brands, stacking trade deals with FSIs and/or Shopper Marketing
support drives synergy with trade deals, making the trade deal more effective in the
short and long term – benefits in addition to baseline gains driven by Shopper
Marketing.
1 Cumulative Volume, Deal + 12 Weeks Post, Deal Buyers vs. Control. Pt. Difference, deals with support vs. deals without support.
2 SOR, 12 Weeks Post the Deal, Deal Buyers vs. Control. Pt. Difference, deals with support vs. deals without support.
For Brand A, Shopper Marketing Support + Trade Deals drive benefits
in terms of long term loyalty that no single trade driver alone can drive
Shopper Marketing Summary – Best Vehicles by Brand by Synergy with Trade
Brand A Brand B Brand C Brand D Brand E Brand F
Importance of
Shopper
Marketing/Trade
Synergy Across
PPGs
1 Drives big ST gains
in lift, plus LT loyalty
& volume
6 Helps trade
volume expand
category, little
SH benefit
4 Some vehicles
drive significant
ST lift & trial,
less LT benefit
2 Drives lift, trial,
LT volume per
buyer & loyalty
5 Some vehicles
drive significant
ST lift & trial,
less LT benefit
3 Drives lift, trial,
LT volume per
buyer & loyalty
Vehicle Rank
1 Targeted Mktg
(e.g. Catalina)
Targeted Mktg (e.g. Catalina)
Shelf Signage
POS In-Ad
Support (e.g. Recipes &
Basket Builders)
Floor Signage
POS In-Ad
Support (e.g. Recipes &
Basket Builders)
2 FSI FSI Milk Media (e.g. BoxTop)
Shelf Signage Milk Media (e.g. BoxTop)
3 Shelf Signage Floor Signage Floor Signage FSI Shelf Signage
4 POS In-Ad Support FSI Other In-Store (e.g. Sampling)
Floor Signage
5 Shelf Signage FSI
The impact of Shopper Marketing with Trade varies by brand. The table below
summarizes the “best” Shopper Marketing vehicles by brand in terms of their ability to
drive synergy with trade deals*.
* Vehicles are ranked on their synergy with trade in driving ST lift, trial, LT volume per buyer, and loyalty. These may or may not be
the best vehicles overall, including trade and baseline impact, but they are the most important vehicles in terms of aligning
Shopper Marketing support with Trade deals.
Total Category Planning
Shopper Marketing Synergy with Trade
Thank you!
Questions?
Spire is an industry leader in quantitative Shopper Intelligence providing
smart, actionable shopper analytics and marketing program execution to
retailers and manufacturers.
Megan R. Margraff
Chief Analytic Officer
Spire, LLC
meganmargraff@spirenow.com