Hain Celestial

Business Challenge

The Target team at Hain Celestial Group Inc. felt they’d gotten into a rut with promotions — same discounts, same ideas, same number of weeks. With a limited trade budget, the team wanted to determine if they were spending those dollars wisely. And, if not, where those dollars could be better spent. But where to start?

Solution

A demand intelligence solution that could quickly import and analyze large swaths of historical and current POS data, and provide comprehensive, easy-to-use dashboards that allowed users to easily export data into insightful reports and charts. 

Business Benefits
  • Determine true incremental lift of promotions.
  • Establish a benchmark that helps you see whether the lift was a “smart” one.
  • Driving volume and sales with optimized promotions.
  • Reallocating promotional dollars more effectively.
  • Determining which promotions fare best with which retailer.  

“Most CG companies analyze promotions. But are they asking the right questions? Most only look at lift without considering how incremental costs affect their incremental dollars. And they don’t set benchmarks — they don’t have the software to perform those analytics,” notes Jeff Schonhoff, Director of Sales-Target with the Hain Celestial Group, Inc. “Thanks to SOLYS, I can do that every Monday morning.”

“Tea is a very seasonal business, so you have to get the right promos at the right time,” he notes. And Schonhoff suspected the tea category promotions weren’t performing. To see if that was the case, he imported POS data into SOLYS and looked at sales on a weekly basis year-over-year to identify how the category was trending and what weeks demonstrated the best sales. Once he’d accomplished that, he targeted weeks to capitalize on.

Getting out of a promotional rut.

“In the past, we’d run the same 10% TPCs for six weeks. I had SOLYS run an analysis of every promotion from the previous year so I had a baseline to compare the promos to. Then, to see what the true lift was, I incorporated the costs of running the promotion,” he explains. “After reviewing the data, I proposed cutting the discount to 5% and running the TPC more often to drive more volume. We ran the 5% TPC earlier in the season for two weeks and on Monday morning SOLYS instantly showed me the lift, incremental cost and my incremental gain. We could see right away that it was working.”

The next question was — do we continue this trend? “We ran the 5% TPC for 10-12 weeks and had almost as strong a lift. We realized the consumer was looking for tea, we had name recognition and that if the item was flagged, they’d buy it at a lesser discount. Tea tends to be a feel good purchase and we had proof that we could drive more volume because the discount amount didn’t matter.”

Reallocating promotional dollars to where they have the biggest impact.

Schonhoff didn’t stop there. He did the same analysis for personal care — looked at all the promos, determined true lift by factoring in the cost of running the promotion and compared them to the baseline he’d established. “Most of the promos were returning below 1.5 or 1. We had to ask — do we invest in tea promos because they perform better? Or can we improve the personal care promos?”

At first, it looked like the personal care promos simply weren’t working. “But when we sliced and diced the data with SOLYS looking at a variety of segments — face care, hair care, brand, size, timeframe — we found that some segments performed very well,” states Schonhoff. “Because we knew which segments were worth promoting and which were not, we could look at other ways to spend money and improve sales.”

“We can break old habits in our promotions. If a promotion does well, we leave it alone. But if it doesn’t, we try something new. Instead of running a TPC, we’re testing a gift card option. When the promotion ends, SOLYS will be able to immediately tell us if it was a smart lift. We’ll do the same with receipt marketing. Because of SOLYS we have the option to explore and improve sales and volume.”

Gains for retailers and suppliers.

“We can make an educated decision and demonstrate why we’re doing what we’re doing,” he notes. “If a Buyer expects us to run a promotion and we have to run it, we can demonstrate why we shouldn’t continue doing so or how we should change it up. We can make promos more efficient or better. Or if we need to run a poor-performing promotion in order to block the competition, we can demonstrate why that’s smart as well.” 

“Ultimately, we’ve been able to convince Target to change our promotions because we have the data to demonstrate it works. They see that we’re not taking money away from them, we’re just shifting our spend so we both gain.” 

It started with tea and led to personal care – but it doesn’t end there.  Schonhoff is also using the baseline smart lift strategy and working with Headquarters to analyze returns across different Retailers.  “We need to understand which Retailers are driving the strongest returns for the company and allocate our Trade Spend accordingly to drive maximum sales for the organization.”