Optimising promo selection with AI to increase profit

Discover how AI can enable grocery retailers to plan promotions that consider seasonality, unique pricing, and product data to engage customers, increase sales, and grow profits.

Add Intelligence & Harvest Profit

Recent advances in artificial intelligence (AI) brought to market by Chat-GPT and GPT-3 is a clear signal that AI is a viable technology for retail marketing departments. Integrated with Comosoft LAGO, the AI-based DecaSIM promotion ranking tool adds an additional layer of intelligence to the existing planning process, adding measurably to the impact of the weekly ad and on store profitability. 

Implementing DecaSIM’s AI solution is easy. Our technology integrates seamlessly with existing processes and infrastructure.  To demonstrate this, a leading regional grocer implemented a live test and generated positive returns from week one. By optimizing which promos to feature in its advertising, their customers were more engaged with the offers, which increased weekly sales and grew profits (EBITDA) by 8%.

Customise promos on undiscovered shopping patterns

Retail price promotions serve as a catalyst for customer engagement, loyalty rewards, and shaping purchasing behaviors. However, as promotional strategies become more intricate, the challenge lies in leveraging these discounts to drive incremental shopping trips.

Customer behavior is complex and in the realm of promotions there are many potential unintended consequences. For example, different promotions often cannibalize one another by appealing to the same audience. The net effect can be a zero increase in customer engagement. In today’s inflationary environment, this can result in a missed opportunity to increase shopping trips from the growing audience of value-conscious shoppers.

Comosoft LAGO and DecaSIM work together leveraging DecaSIM’s advanced retail AI to create a predictive model that simulates the response of your shoppers to different promotional strategies. Through this innovative AI technology, we can discern the most potent promotions for drawing in customers. Our integrated solution adeptly pinpoints the promotions that resonate most with your price-conscious shoppers, fostering heightened engagement, increased sales, and amplified profits for our valued retail partners.

Putting theory into practice

A 300+ store regional grocer selected a region and, using the Comosoft LAGO system, created a specific version of its weekly ad circular to optimize during a ten-week test period. Each upcoming week‘s promotional plan was run through the DecaSIM optimizer during the test. The results of this analysis were then used to select which items to feature on each page of the circular.

The test region consisted of 104 stores. An additional control region was created with 65 stores. To evaluate the intervention, the percentage of shoppers who engaged with the promos featured in the weekly circular was measured in the test region stores, and these results were compared to those from the control region stores. Total store sales in the test and control region stores were monitored carefully for changes.

Results show increased performance on all measures

Conducting these tests, the retailer established a set of measures to evaluate the performance of the recommendations, increased engagement with promos, impact on total store sales, and store profits. On every metric, the results showed a positive increase versus the control.