Using Signal-Based Merchandising to Help a Global Chocolatier Avoid Out of Stock Issues and Drive Sales
Using Signal-Based Merchandising to Help a Global Chocolatier Avoid Out of Stock Issues and Drive Sales
The U.S. is the world’s largest chocolate market and consumers are increasingly choosing high-quality chocolate. Trax’s client, a leading European chocolatier, enjoys a substantial share of the premium segment of the global market. But while the company knew there was no shortage of consumers eager to buy its scrumptious products, serious out-of-stock (OOS) issues at Walmart were impacting sales and possibly leading customers to make spur of the moment decisions to buy competitors’ treats instead. It’s no surprise that OOS problems often impact loyalty: after all, why should customers be loyal to a brand whose product isn’t on the shelf?
The Challenge
The U.S. is the world’s largest chocolate market and consumers are increasingly choosing high-quality chocolate. Trax’s client, a leading European chocolatier, enjoys a substantial share of the premium segment of the global market. But while the company knew there was no shortage of consumers eager to buy its scrumptious products, serious out-of-stock (OOS) issues at Walmart were impacting sales and possibly leading customers to make spur of the moment decisions to buy competitors’ treats instead. It’s no surprise that OOS problems often impact loyalty: after all, why should customers be loyal to a brand whose product isn’t on the shelf?
The Solution
The chocolatier was able to answer these questions and strategically reduce OOS issues with Trax’s Signal-Based Merchandising (SBM) solution – which provides continuous store-level execution data that enables merchandising teams to optimize sales at high-traffic stores.
Here’s how it worked: during a six-week period, engaged shoppers were deployed to almost 1k stores to provide real-time information on the chocolatier’s targeted SKUs, which served as signals for the FlexForce team. Team members conducted 870 visits to 567 stores and were deployed to fix the OOS issues once a predetermined threshold for lost sales had been reached. This ensured that each merchandising visit yielded a positive ROI for stores with both large and small footprints and allowed the client to make any necessary price tag and inventory adjustments.
The Results
OOS issues resolved
After 100+ restock orders, OOS plummeted from 50% to 17% at select Walmarts during the 3.5 day SBM cycle. As soon as it could determine where shelves were bare, the chocolatier was able to deploy the Flexforce to restock immediately.
Sales boosted
The chocolatier experienced $111,000 in lost sales due to OOS issues during the six week trial period. Fortunately, Trax’s SBM solution ensures that the company now has the tools to identify and mitigate OOS problems as they occur and before revenue is impacted.
Improved marketing strategies
The solution also provides additional insight into product popularity and demand. The chocolatier was surprised to discover, for example, that dark chocolate was the top seller of its nine SKUs, enabling it to tailor merchandising and marketing strategies accordingly.
Conclusion
In addition to pinpointing recurring OOS and the impact on sales, SBM revealed that the nine top SKUs were almost never in Walmart’s backstock. The chocolatier was able to address the issue and make sure that an adequate supply of product was always on hand, so customers were never disappointed during seasonal holidays. After all, who doesn’t love a chocolate truffle on Valentine’s Day?