Commercial Transformation
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Commercial Transformation

We help retailers transform their businesses into leading multichannel enterprises by using advanced analytics to inform products, pricing, and positioning.

 

What we do

We work with retail clients to sharpen their end-to-end commercial offerings—from assortment planning and optimization to category strategy and management, pricing and promotions, personalization and loyalty, vendor management, and fresh and private label. Over the course of 650-plus client projects within the past 5 years, we have served leading retailers on commercial issues across brick-and-mortar, online, and mobile channels. Our work spans every geography and retail subsector, such as grocery, drug, mass-market, apparel, soft lines, and hard goods, including grocery, health and beauty, apparel, and nonfood.

Examples of Work

We help retail leaders across the world to transform their operations whether they are brick-and-mortar or multichannel. Using advanced analytics and proprietary tools, we shape growth strategies.

Vendor negotiations

We supported a merger of two European grocers, realizing approximately 3 percent of cost-of-goods-sold (COGS) synergies through a clear negotiation strategy, rigorous delivery engine, and analytics. Having started by defining the methodology to compare similar level of COGS and margin between retailers and their operating companies, we moved to selecting top vendors in scope and prepared ASKs based on price comparisons for matched SKUs. Our proprietary advanced-analytics approach created superior insights and prepared vendor playbooks with the required fact base for negotiations, supported by extensive negotiator training.

Holistic transformation

We supported a multiyear performance-based transformation of a Northern European grocery retailer struggling for years—financially, value proposition-wise, and organizationally. The transformation included several commercial programs, including pricing, promotions, loyalty program, vendor negotiations, and category initiatives. The program involved a company-wide diagnostic and strategic plan, realizing quick wins, detailing the plan, and moving into implementation through targeted initiatives driven with line organization. Overall, the company moved from hundreds of millions in annual losses toward hundreds of millions in annual profit (a profitability improvement of 2.5 percentage points).

Insights-driven commercial transformation

We advised a leading North American retailer on the design of a new commercial strategy based on refreshed customer segmentation and local market insights, and we deployed industrial scale-pricing and promotions-effectiveness tools to execute the strategy and arm the merchandising organization with advanced insights.

Category strategy

We worked with a South American multicategory retailer to reset its category strategy, rebuild the product assortment and architecture, and grow private-brand offerings with a distinctive value proposition in a challenging marketplace.

Featured Capabilities

Many of our retail commercial projects draw upon the portfolio of proprietary tools that we have developed alongside industrial-scale solutions, as well as our expertise in advanced analytics.

  • Periscope, which we deploy to manage investment trade-off decisions across all commercial and marketing levers
  • Merchant Academy and Category Accelerator, which helps our clients develop the skills required to address today’s business challenges so their organizations can achieve outsize, lasting business impact

Featured Insights

Article

[email protected]: Solving the growth challenge in consumer packaged goods

– The magnitude and pace of change in the US market have undermined traditional growth models for many consumer-packaged-goods companies,... especially larger ones. Companies need to combine greater agility with new types of scale advantage to compete more effectively.
Article

The new model for consumer goods

– Why the industry’s historic value-creation model is faltering—and how to reinvent it.
Article

The need for speed: Capturing today’s fashion consumer

– Top performers are using data analytics and consumer insights to stay ahead of the pack.
Article

Thinking inside the subscription box: New research on e-commerce consumers

– We surveyed thousands of US shoppers to understand subscription e-commerce trends. The findings have implications for start-ups,... as well as retailers and consumer brand manufacturers entering the market.
Article

How retailers can improve price perception—profitably

– New methodologies, powered by big data and advanced analytics, can help retailers attract value-conscious consumers without sacrificing... margins.
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Who’s shopping where? The power of geospatial analytics in omnichannel retail

– Using advanced geospatial analytics, retailers can now quantify the true economic value of each of their stores across channels—and... they’re uncovering surprising insights.
Article

Partnering with China’s retailers: A guide for consumer-goods companies

– Companies must tailor their key-account-management model and capabilities to the Chinese context.
Article

Lessons from Latin America’s leading consumer-goods companies

– Our survey of local and multinational companies yields useful lessons in how to navigate the dynamic Latin American market.

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