Measuring the impact of a new promotion: 84.51° helped Kroger derive actionable insights from a promotional campaign.
Kroger sought to measure the effectiveness of a promotion—“Save $10 when you spend $75 or more on your trip”—that ran as a digital coupon. Kroger wanted to understand if this promotion was effective at bringing in new customers and driving sales uplift and whether they should run this promotion again. From a customer perspective, insights like these were important to ensure the promotion was relevant to shoppers.
Kroger engaged 84.51°’s Enterprise Price & Promotion team to analyze the impact of the promotional campaign and identify actionable insights. The team conducted controlled store testing using causal impact analysis, combined with customized research.
The team found that while the promotion did not bring in a significant number of new customers, it attracted previously lapsed customers, or customers that had not shopped at Kroger in 4 weeks. Testing also indicated that total customer spend was higher at stores that offered this promotion.
The team found a favorable sales-to-cost ratio, meaning the promotion generated more incremental sales than it cost to run the promotion. Based on the team’s findings, they recommended running the promotion again and estimated that scaling the promotion would be worth $36 million in incremental revenue.
Armed with these insights, Kroger decided to scale the promotion across more stores via its website, email, and in-store signage. The research benefitted customers by helping Kroger determine which shoppers find the promotion most relevant—in this case, lapsed customers—and scale it appropriately.
By gaining an in-depth understanding of the promotion’s performance and impact, the company will also be able to optimize future promotions and continue to deliver value to the customer.
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