Ad hoc short-term deals are in the past. Today well-managed promotions, various promo-activities and campaigns are vital for any retailer. They bring value and increase profits. It makes sense to organize and manage promotion activities effectively, both in terms of marketing and inventory management. Retailers often mistakenly rely on marketing efforts and forget that promotional inventory and its availability is the core of this business. If you do not have enough promo-goods on your shelves, your campaign fails.
ABM Inventory is a great tool that helps you to effectively run and manage all stages of your promo-campaign, to be well-prepared and make a timely goods reorder in a right increased quantity. ABM Inventory has a built-in “Promotions” tool which is used in case you have to face a demand increase.
List of promotions
This setting allows to create a schedule, and to plan inventory and storage buffer change for a certain time and date. The system will automatically make all changes on the pre-set date.
System interface allow to create and edit promotions, as well as to exchange data with a client’s existing accounting system. The client of ABM Inventory can simultaneously use both systems, the ABM Inventory and the accounting system to run various types of promotions.
General information about promotion
To create a new document you have to indicate promotion name, type, period, dates and buffer settings. Such settings usually include:
- Buffer change in the beginning of a promotion period, either on the date of period start or the date of order forming. When we say order, we mean the order which will have to be delivered on the store shelves before the promotion or season starts.
- “Ignore max buffer” function shall be turned on, if the maximum buffer quantity for the certain products within a given period shall not influence buffer calculation for this period.
- “Initial promo buffer ≥ Current promo buffer” - this option is used to save the buffer level when the promotion period starts. The system therefore will not consider possible pre-promotion low sales, or anything else, and will not decrease inventory quantity.
Buffer setting types:
- ADU coefficient - ADU system calculates buffer on the basis of average sales, taking into account the change coefficient indicated in the table of products.
- Promotion buffer quantity - the system will use the buffer quantity indicated in the table of products.
- Buffer coefficient - buffer will be calculated in accordance with the buffer change coefficient indicated in the table of products. When the buffer quantity is calculated, the system uses the date indicated in the field “Buffer date” or used the last date before the promotion (the latter is possible if the setting “Use the last pre-promotion buffer quantity”.
– Average sales coefficient - the buffer will be calculated in accordance with average sales change coefficient indicated in the table of products. The dates (from … to…) are being additionally indicated. The dates which will be selected for the calculations (only promotion period or the whole period) are also indicated separately.
- Previous same-type promotion sales data - the buffer is being calculated on the basis of average sales data during previous same-type promotion campaign.
- “Freeze buffer till __date” - product buffers will be kept on the same level until stated date ( buffers will not be changed according to the DBM algorithm, instead they will be changed according to promotion settings).
“End action” - if the field “End date” is not marked, the system will make the actions for the promotion start, and later on the promotion will be ended and its editing will be restricted. If the field “End date” is marked, the system demands to set promotion end date and the action to be completed upon promotion ending:
- “Restore old value” - after promotion ends, the system restores the initial pre-promotion quantities, safety buffers, buffers and statuses which have been active before the promotion.
- All goods OUT MOVER - after promotion ends, the system marks all goods with the label OUT (meaning the product is taken away from the assortment).
- All goods MTO - after promotion ends, all goods receive MTO status.
- Calculate buffer for the last order - the system smoothly decreases inventory level to prevent post-promotion leftovers piling. When the promotion is over, quantities, buffers, safety buffers and statuses will be restored.
- Sell out SBP - if this setting is active, on the day of order forming safety buffers for the promotion goods are set to 0 level. Here, when we say order, we mean the last order within current promotion period.
When all settings are being made and saved, you have to indicate all SKU-locations, which are needed for the promotion, as well as indicate all coefficients, buffers and safety buffers for each of them according to your settings.
List of promotion products
The products can be added manually or using an Excel list.
Templates for products adding to the period
When you create a new period, in its window you have a tab named “Products”. In this tab you can calculate promotion buffer, even before the promotion starts (meaning, before the system activates the promotion), using a “Pre-calculation” function. If it is impossible to calculate promotion buffer, you will see a red icon in two columns - “Expected buffer” and “Pre-calculation error”. You can sort the products using a “Pre-calculation error” filter and place these goods into another promotion, with different settings (you can do this using a “Move” button).
The system calculates “Average sales during promotion” for each SKU-location, which helps to efficiently and flexibly manage buffer levels depending on the promotion success and real-time demand rather than on a forecasted one.
Sometimes suppliers offer lower procurement prices for the periods of promotions. In this case the system can keep record of a promotional (contractual) procurement price. The price is valid for the period stated in the agreement, so the orders to the supplier which have to be delivered during a contractual period, are automatically generated using promotion (lower) prices.
ABM Inventory has an automated promotion product status change (MTO to MTS, and vice versa, after promotion ends). This function helps to manage products which enter the assortment only for the period of promotion.
Those goods which have already entered promotion period, are marked with light-purple colour:
The windows for new and sent orders editing, as well as Buffers section contain the information on promotion products. There is a button which shows active promotion for each product. If you press this button, you will see a pop-up containing the following information:
- Title – product code and name
- Promotion name (and promotion reference)
- Promotion type
- Promotion start date
- Promotion end date
This information is handy and easy-to-check.
Information on the active promotion product
Each promotion can be easily “copied”, which means you can create a copy of your promotion (either active or ended), using the same settings.