Promotional Planning

Client / Profile:

Office Furniture department within a national retailer. Majority of product is imported direct to outsourced warehouses and then delivered either direct to customer or to store. They promote 48 weeks a year.

Issue: Poor promotional return and therefore poor business growth.

• Forced to sell what they had bought.
• No effective promotional planning.
• High stock levels.
• High warehouse costs.
• Low second margin.

Cause:

There was inadequate promotional planning, created by there being no link to range review, new product introduction or long-term product aspirations.
Rather than having a choice, the business unit was forced to promote what they had in stock.

Poor management disciplines caused significant changes to be made within the leadtime, which were either unachievable or caused massive pressure on the supply chain.

Response:

These root causes were camouflaged by poor stock management disciplines. The key action was to implement a practical promo planning methodology and timetable, integrated with basic stock management.

Outcome:

• 40%+ Sales growth
• 30%+ first margin growth
• 24% inventory reduction
• Significant warehouse savings

Learning:

The longer the lead-time, the more critical clear accountabilities become.