"Cartoons in Sales Management - PowerPoint"
Multivariable Testing (MVT®) for Breakthrough Increase in Retail Comps Comp Sales 20 15 10 % 5 Above Previous Year 0 –5 MVT Test Implementation –10 –15 Sneaker Sales MVT® Factors Objective: Increase Sales ($MM) * Not controllable Sneaker Sales Synergy Between Display and Colors Sales Comps D–: Fancy display D+: Basic display D–: Fancy display D+: Basic display F–: Display by F–: Display by F+: Mixed colors F+: Mixed colors color color The MVT® Matrix 23 Factors 24 Recipes 8,388,608 Potential Recipes Why MVT® Works MVT® Ideas All Combinations Recipes 10 Thousand 12 20 Million 24 30 Billion 32 40 Trillion 44 Retail Applications of MVT® Media Mix— Invest Where Your $’s Work Hardest Factor – + A: TV Ad Frequency 125 pts/week 350 pts/week B: TV Ad Time of Day AM PM/News C: TV Ad Day of Week Mon–Wed Thur–Sun D: Retail Radio Content Low price Value E: Retail Radio Distribution Rock stations Country stations F: Retail Radio Day of Week Tue–Fri Sat–Sun only G: Radio Frequency 100 pts/week 200 pts/week H: Radio Time of Day 5 AM–9 AM 6 AM–7PM I: ROP Size Full page Half page J: ROP Frequency 2/week 4/week K: Direct Mail Size 8 1/2 x 11 11 x 17 L: Direct Mail Drop Mon–Wed Thur–Sun Media Mix The Results • $28.5 million in profit improvement • Advertising expenditures reduced by 20% • In-store sales increased 10%+ Print Advertising— Increase Traffic and Spend Less Factor – + A: Background of Cover Indoors Outdoors B: Graphic Style Block Curve C: Number of Pages 12 24 D: Color Scheme Tame Bold E: Graphic Scheme Sketch Photo F: Product Display Product only Product in use G: Sports Sponsorship Logo On cover Off cover H: Warranty Policy Promo On cover Off cover I: Credit Promotion No Yes J: Pricing on Cover Yes No K: Celebrity Endorsement Yes No L: In-store Copies No Yes M: President‘s Picture No Yes N: Drop Day Thur–Fri Mon–Tue O: Paper Type Gloss Standard P: Paper Weight Heavy Light Q: Headline Multiple Single R: Direct Mail No Yes S: Type Size 14 pt 12 pt Print Advertising The Results • Profit impact: $22.8 million • In-store sales increased 10%+ • Preprint costs reduced by 30% Internet— Raise Sales . . . Not Just Clicks Factor – + A: On-line partner ―A‖ web sites ―B‖ web sites B: Creative Graphic on Banner Human face Cartoon animal C: Animation of Graphic No Yes D: Product Graphic Best seller Generic E: Tagline Direct Creative F: Tagline Animation No Yes—scroll across G: Background Color Blue Yellow H: 3-Dimensional Words and Graphics No, flat appearance Yes, shadows, etc. I: Sound (Rich Media) No Yes J: Font Standard Italics K: Pop-up Window (When Mouse Over) No Yes L: Drop-down Box in Banner No Yes—product selection M: Words on Button ―Click here‖ ―See more‖ N: Size of Button Large Small O: Message: On Sale—Low Prices Yes No P: Message: Great Selection Yes No Q: Message: Fast Service, Guaranteed No Yes R: Message: Privacy and Security No Yes S: Show Product Price No Yes T: Company Logo Large Small U: Border Thick line Thin line V: Colors Standard Brighter palette Internet The Results • Click-through increased 26% • Sales jumped 72% • Revenue soared by $ millions per month Merchandising— Better Assortment, Display, and Pricing Factor – + A: Display at entrance Hot product Freq. purchase product B: Checkout lane products Assortment A Assortment B C: Substitute portion of Category C with Category D No 25% D: Substitute portion of Category E with Category F No 25% E: Substitute portion of Category G with Category H No 50% F: Bulk-out different high-volume product Every 14 days Twice per week behind checkout G: New product line #1 Do not add Add H: New product line #2 Do not add Add I: Product line #3 Keep Eliminate J: Product line #4 Keep Eliminate K: Exchange location ofCategory I with Category J No Yes L: Exchange location of Category K with Category L No Yes M: Product demonstration plan Status quo New N: Sales commission Flat rate Vary with margin O: Planagrams Current Revised P: End cap products Freq. purchase New introductions Q: Pricing of core products Current +10% R: Pricing of accessories Current +10% Merchandising The Results • Sales dollars up 11.7% • Margin dollars up 15.2% • Increased sales of high-margin products Combine— Advertising, Operations, Merchandising Factor Helped Hurt No Diff A: Management Bonus Plan +2.0% B: Sales Associates Incentives +6.5% C: Price Controls D: Product Demonstrations E: Financing –3.4% F: Financing Promotion in Ads G: ROP Promotions –2.8% H: Time Between TV Flights I: Newspaper Insert Penetration –2.1% J: Newspaper Insert Timing K: Phone Calls to Best Customers L: Merchandise Detailing M: Greeters N: Training for New Hires (mentoring) +4.4% O: Fast Delivery Promotion P: Computerized Inventory Status Q: Radio Advertising Message +3.3% Increase Comp Sales . . . And . . . Raise Stock Price 11x 20 10x 15 9x 8x 10 7x 5 6x 0 5x 4x –5 3x MVT Implementation –10 2x –15 1x Implementation 0 Saks Incorporated Carson Pirie Scott & Co. Situation SDSG: Comp Sales 1.0% • Comp sales pressure due 0.0% * to increased competition -1.0% FY00 FY01 FY02 FY03 from specialty retailers -2.0% -3.0% and discounters • Continued Operating SDSG: Operating Margin Rate Margin erosion 8.00% 6.00% • General discontent in the 4.00% organization regarding the 2.00% 0.00% ability to understand the FY00 FY01 FY02 FY03 impact of operational *Saks Department Store Group changes MVT: Process Team Brainstorming/ Categorization Screening Refining Implementation Development TIMETABLE A high-level overview of the implementation plan used at CPS is shown below Screening • A 32-factor screening design was selected • Stores were grouped by media markets and randomly assigned to each recipe • At the outset, several stores were to be dropped from the final analysis (but not participation) based on: – Volatile historical sales – Competitor entering the market – Lack of year-over-year sales information (new stores) • Other stores were dropped from the final analysis because of special circumstances that arose during the test 32 Factor Test Name (-) Level (+) Level Store Logo Younkers Non-Younkers ROP Messages Revised current Single message ROP Size Current Reduced Best Customer Postcard No Yes Double Points No Yes Radio Support for Major Events Current Plan Increased RTW Wrap Cover No Yes Catalog Page Counts Current A/B Mix A only Sunday Insert Program Insert ROP Catalog Mid-Week Distribution Insert Mail Event Duration Current Extended Mail Your Rewards Newsletter Yes No Early Store Hours Yes No Promote Deferred Billing No Yes Television Support for Major Event Current plan Increased New Account Discount Current Double 32 Factor Test Name (-) Level (+) Level Wardrobing Current Increased Friendly Program Current Enhanced ROP Frequency Current Increased Credit Reactivation Coupon Current Increase by 10 pts Store Announcements Current Recorded Direct Mail Quantity Current Reduced Promotional Location Outpost Inpost Everyday Staffing Level Current Increased 10% In-Store Product Demos Current Increased Customer Accommodation No Yes Big Day Staffing Add Add Double Radio Support for Major Events II Current plan Decreased Telemarketing No Yes VCMG Communications No Yes Cosmetics Clientelling No Yes Issues During the test we encountered several operational challenges, including testing compliance. In order to resolve this issue we: • Distributed weekly Associate communications • Held compliance audits • Tracked sales weekly Compliance during testing is critical to the validity of the results!!! Media Evaluation—Implemented Factors from MVT Factor Action ROP Size Reduce size of ROP ads Best Customer Postcard Productivity Add Best Customer Postcards Double Points Use double points promotions TV Support for Major Events TV support for major events in all markets New Account Discount Increase opening day discount by 10 pts Credit Reactivation Coupon Increase opening day discount Direct Mail Quantity Maintain current level; do not reduce Everyday staffing Maintain current level Media Evaluation—Implemented Factors from MVT Factor Action In-Store Product Demos Increase in-store product demos Big Day Staffing Increase Big Day ―extra‖ staffing Cosmetics Clientelling Implement Cosmetics Clientelling Program Full color broadsheets Implement in lieu of ROP Catalog page counts Produce one-page count version vs. multiple page versions Sunday Inserts productivity Retain use of Sunday Inserts Increase ROP Frequency Maintain current frequency Passport promotions Implement as ‗use card‘ for charge card only MVT: Refining Results • The project was 15% 10% viewed as a success 5% throughout the Comp Sales organization 0% -5% • Diligence during the MVT Implementation test led to valid results -10% • Carson‘s total Sales -15% Month Comp for the implementation period was 5% Comp CPS vs. US Retail Comps Before MVT During and After MVT Feb ‘03-Jul ‗03 Aug ‘03-Dec ‗05 Comp Sales Comp Sales Change Carson Pirie Scott -3.9% 2.4% 6.3% US Retail -4.5% -0.5% 4.0% (Census Bureau) Net Increase 2.3% Key Factor Impacts Factor Fall QualPro test finding Estimated Sales Gross Expense GM or POS impact Margin Impact Expense Reduce size of storewide ROP ads Sales impact of: 0% $______ $______ $______ $______ POS impact of: 0% Utilize TV to support major storewide and category Sales impact of: +$2.17% $______ $______ $______ $______ events POS impact of: 0% Mail ―big up‖ postcards to top Your Rewards Sales impact of: +1.8% $______ $______ $______ $______ customers POS impact of: 0% Change emphasis of ROP ads from cuts & lines to Sales impact of: 0% $______ $______ $______ $______ a single message POS impact of: -1.29% Offer Double Your Rewards points during major Sales impact of: +3.19% $______ $______ $______ $______ storewide events POS impact of: 0% Don‘t alter current mid-week distribution methods Sales impact of: 0% $______ $______ $______ $______ (i.e. do not exclusively use inserts) POS impact of: 0% Add 20% more staff on ―big days‖ Sales impact of: 3% $______ $______ $______ $______ 7.22% on the day and 1.0% on the week POS impact of: 0% Total: $_____ $_____ $_____ $_____ Key Learnings Operational • Team structure • Communication • Compliance • Implementation/execution • Speed to market • Validation • Proof of concept