Stop Retail’s Promotional Race to The Bottom

Stop Retail’s Promotional Race to The Bottom

DynamicAction Adds New Affinities Capabilities to Curb Consumer Discounting Addiction and Help Retailers Increase Average Order Value, Revenue and Profit
Affinities offers a deep-dive into basket analysis and identifies key purchase patterns that lead to lift and profitability

SILICON VALLEY: Jan. 10, 2017 — As retailers work to recover from the “Year of Promotions,” where promotions were up an average 84% for 2016 globally versus 2015, DynamicAction released new Affinities capabilities designed to arm retailers with the ability to increase average order value, revenue and profit. With Affinities, DynamicAction helps retailers change the mindset of discount-addicted consumers by creating a path to offer associated and desired products and brands at full price within the same purchase order.

The Affinities feature allows merchandisers to seamlessly identify multiple product correlations and product trends to discover which combination of products, promotions and customer profiles most frequently drive purchases and pinpoint key opportunities to optimize their merchandising strategies. By connecting these data points, retail merchandisers can more accurately predict sales trends and increase basket size and profitability.

Key capabilities retailers gain through affinities include:

  • Retailers gain access to analytics-driven insights on inventory, profitability and likelihood that products, brands and categories will be purchased in isolation.
  • Opportunities are also highlighted for combinations of products, customer profiles and promotions that will produce substantial lift in revenue and profit.
  • As a result, the inherent bias towards cross-promoting best sellers, which often will sell through without promotion, is dramatically reduced.
  • In addition, a merchant may decide not to pair certain items together in a promotion, a product recommendation or an email campaign because of a variety of reasons that impact revenue and profit. For example, neither of the items are full price; or because they will sell through an item’s inventory without the additional exposure; or because an item garners low profit-per-view; or simply because other product combinations will offer better results from the cross-exposure.

“In such a precarious time, retailers need to arm themselves with the proper strategies for success. The thirst for promotions is engrained in the consumer psyche, however retailers that are able to thoughtfully place the right items in the right promotions to the right customer segments stand a better chance of generating higher, more profitable order values,” said Brian Tomz, Chief Operating Officer, DynamicAction. “This new breed of algorithms and deeply analytical tools uniquely enable retailers to evaluate all of their products multi-dimensionally. With Affinities retailers can now identify areas where they can implement different co-marketing tactics or influence store and website layouts to drive profitability.”

The Affinities feature is part of DynamicAction’s 2016.4 release, which is now live in the U.S. and E.U. Note as well that DynamicAction will be releasing the DynamicAction Retail Index: 2016 Holiday and Year-in-Review report, an analysis of more than $9 billion in consumer transactions, next Monday, January 16, 2017. To discuss the Index findings on promotions, returns, inventory levels and consumer trends, as well as this promotion-curbing Affinities feature, please reach out to to schedule a meeting with a DynamicAction representative.