Week to week sales trend can happen organically through seasonality, or from other variables such as marketing and discounting. A common practice to help your customers convert is to give a discount. There are many strategies for this. Discounts can be done at the customer level, order level, or item level and any blend of. In this article, we will focus on how to add discounts and lifts using the forecast function.
Forecast function menu you can locate the
Discount Calculation field under the
Expanding this section will give you access to advanced optional inputs to run a forecast. Under the
Discount Calculation we have 2 options currently.
Gross Sales Retailtotal from the
Volume Methoddropdown / the
Gross Sales Tickettotal in the
Volume Methoddropdown * forecasted
Gross Sales Ticket. Basically, it is taking the discount rate from the trend you are looking at and applying that forward.
This method is good when your discounts are consistent and the normal discounts you see due to customer and order level discounts.
Manual Rate- Fields will show that need to be filled in.
Discount Rate- This will be the rate you want to discount the AIR (Average Initial Retail) by.
Unit Lift- This will be the lift you are expecting to get with the discount applied. This lift we be applied on top of what the normal build/debuilds would be expected due to seasonality. You can use or create reports in your Item Plan Module to identify what the lifts are when taking certain discounts based on historical data or comparable items. reporting article
Discount Range- Select the time frame that this discount and lift will be applied. Afterward it will go back to the
Click on the below image to zoom in and see the results.
Wk 22 - Wk 23 are using the
Defaultforecasting methodology as they were not included in the selected
The current volume trend was calculating out to be 8.18% greater than last year and that is what is forecasted for these weeks.
The volume trend discount % was 4.95% on average over the past 4 weeks so that was applied to Wk 22 and Wk 23 as well.
Wk 24 - Wk 26 will have the
This is where the additional lift is applied and Wk 24 builds by 1.50 over Wk 23. Looking at last year (the seasonality applied before
Discount Calculation) the build was flat to Wk 23 into Wk 24 (1.00).
% Var Act/Plan vs. Act LYover last year goes from 8.18% to 62.27% based on this lift.
Discount %goes from 4.95% to 25% and you can see in the
Gross Sales AURthe price go to $200.25 from $253.80.
Wk 27 - Wk 28 (and forward based on the forecasted timeframe) go back to the
Defaultcalculation of forecasting.
There is a debuild into Wk 27 by 0.63 to get back in line with the seasonality.
% Var Act/Plan vs. Act LYgoes back to the 8.18%.
Gross Sales AURand
Discount %are also back to the
From here you can determine if the discount % is needed or not. It could build your Sales $'s but what happens to the Gross Margin $'s? Is this discount to drive sales or clear our a bit of inventory? What does discounting this item do to the rest?