Overview
As promotions have a significant impact on demand for retailers, It is important that the impact of the promotions is layered into the forecasts in order to allocate and or receipt in an appropriate amount of stock to cover the lifted demand. Promotional Causals centralizes the setup of promotions to apply the effects across allocations, item planning and the new assortment planning module.
Creating a promotional causal
Navigate to Settings > Promotional Causals
Add a promotion
Name or describe the promotion
Select the products to apply the promotion to by setting the appropriate filters
Select the applicable locations for the promotion
Note that for item plan forecasting at a channel level, a causal will apply to the entire channel if it is assigned to a location within the channel
Define the timeframe for the promotion
Enter the expected Lift % and if applicable, the Discount % to apply (promotional lifts do not need to have a discount associated)
Click Save
Note that no automated tasks will be run after you create Promotional Causals.
Editing and Deleting Promotional Causals
You can edit the Promotional Causals that you've created through right click and Edit. The system will open the modal that you used to create the promotional causal and you can edit any parameters you like.
You can also delete Promotional Causals that you've created through right click and Delete action. Once you click on Delete, system will delete the promotional causal.
Note that your edited and deleted Promotional Causal will not be automatically applied.
Applying Promotions in Allocations
In Allocation Strategies, rerun the applicable strategies to see the impact, note that the overnight task will automatically apply the promotional effect to the products.
Depending on the demand type, promotional lifts are applied differently and it is important to understand the difference in each case.
ROS Demand Type
When applied to ROS demand type, the promotion will lift the original forecast according to the promotional lift defined. From there the retrend calculation may further change the overall demand for the SKU/Location in question based on trend of the product.
Total Sales Demand Type
When applying the promotion with a total sales demand type, the total sales quantity specified remains, as a result, the promotional effect will change the shape of the demand, but the overall demand will remain the same. To accomplish this, some periods will decrease while other periods will increase, this is called reshaping demand.
Item Plan Demand Type
Due to the fact that demand is derived from the Item Plan for this demand type, the promotion is not applied in the allocation to avoid double counting the impact of the promotional impact. Instead, promotions should be affected in item planning.
Promotional Causals in Item Planning
To apply promotional casuals to item forecasts in item planning, follow the same steps above to create and filter the products to apply the promotion to.
When running a forecast in item planning, simply select Apply Promotional Causals from the discount calculation menu in the advanced forecast settings and the appropriate lift and discount will be applied to the base forecast.
Note that a promotion assigned to any location within a channel will result in a channel level forecast impact when applied to Item Planning configured by channel.
Promotional Causals in new Assortment Plan
In new Assortment Plan, if you want the Promotional Causal to be applied, please trigger Forecast for the choices that you are interested in to apply your changes.
You can set multiple promotions throughout the year as well as multiple campaigns for the same weeks as well.
You'll see the Lift% and Discount% metrics filled per the campaign details and then these metrics are applied to derive Retail metrics. Please note that sales metrics already include the lift units.
