Procter & Gamble was finding that its two-week promotion events were regularly depleting store inventory, typically at the halfway point of the event, resulting in:
- OOSs and lost sales
- Un-forecasted mid-event replenishment that caused manufacturer supply issues that impacted other retailers as well
- Consumer dissatisfaction
Additionally, when P&G’s key grocery customer reordered mid-event, there was not enough time to get the supply on the shelf before the event was over, resulting in higher-than-desired inventory post-event, and increased carrying costs for the grocer.
P&G launched a project aimed at improving product supply during short promotions to reduce out of stocks and end promotions without excess inventory.
P&G began using Market6’s forecasted demand data, generated from past promotional events, to put the right inventory in place in DCs and stores before the promotion.
During promotional events, they tracked daily inventory, sales and OOSs during the event in DCs and stores, and made quick course corrections as needed to fix problems in flight.
This approach allowed P&G to avoid mid-promotion orders that arrived too late while also ending events with a much lower level of post-promotional inventory overhang. Using Market6 P&G:
- Prevented lost sales of $300K-$500K (per event)
- Cut $500K-$600K in post-event excess inventory (retail value)
- Grew customer satisfaction through the elimination of OOSs
- Lowered the negative impact on factory planning and other retailers’ stock situations