Module: Automatic detection of promotions in the past

Executive summary

The main task of the detection is to fill in missing data, and modify inaccurate data related to historical promotions. To have accurate data is essential to compute the effect of historical promotion; historical promotions, in turn, are important because they serve as a base for computation of future promotions.

Detection

  • Searches for unspecified historical promotions by price
  • Detects historical promotions not specified in the input data and flags them
  • Regulates the length of promotions
  • Adjusts sales prices in promotions and outside of them
  • Adjusts purchase prices in promotions and outside of them
  • Computes the quantity of the product purchased in promotion

All data computed by detection can be sent to the STOCK from the ERP. However, if you do not have these data, the detection tries to find them for you.

There are following parts to promo detection (and each of them can be turned on or off using the settings).

Functional description

Detecting missing promotions by price

Suppose that within a non-promotion period (according to the data), there is detected a short period with a significant decline in sale price and after that, the ‘normal’ sale price is back: it is very likely that in that short period, there actually was a promotion – but not marked so in the data. The detection finds such a period and marks it as a promotion.

To detect a new promotion, the following criteria must be met:

  1. A drop in price must exceed a minimum threshold (which can be set).
  2. A period, in which the price falls, does not exceed the maximum length of a promotion; this period is not shorter than the minimum length of a promotion at the same time. The minimum and maximum lengths of promotions can be set.

Detecting missing promotions by a flag from SIDI

The user can mark a transaction as a promotion using a flag. Although there are no promotions for the period “from-to” in the system, the detection automatically marks these as promotions, based on consecutive sales flagged as promotions.

Adjusting from-to of a promotion

This part of the computation is designed to check (and adjust, should the need arise) the start and end dates of a promotion depending on the development of sales prices.

For the computation, the promotion begins on the day with the cheapest sale price and ends on the day with the greatest increase in the sale price. A new dates of a promotion are sought in the range of ± 3 months of the original dates of the promo. In the settings, you can determine the length (minimum, maximum) of a promotion.

Computing prices

The computation detects 4 kinds of prices; each of the prices is specified for a given item and a given promotion. The detection of these prices can be turned on and off. It is also possible to detect only the prices not pre-filled by the customer.

All the prices are computed using weighted average. For the computation, the important inputs are the period from which the weighted average is computed and types of transactions that enter into the computation.

  1. Promotion sale price

It is computed from sales of the item during the promotion. If the item was not sold even once during the promotion, the price is computed as the average sale price of the product at other stores in the course of the promotion. If there are no sales there either, the price is not computed.

  1. Non-promotion sale price

The computation takes in the sales outside a promotion, first from a period of 3 month around the given promotion, then 6 month and finally 12 months. As a rule, the shortest period from which a price could be computed is the preferred one. If the item was not sold even once during the promotion, the price is computed as the average sale price of the product at other stores in the course of this promotion. If there are no sales there either, the price is not computed.

  1. Promotion purchase price

The computation takes in the purchase price and prices of received distributions during the promotion. If there is not a single distribution, the period for computations is extended to 7 days before the promotion, to include the period of expected pre-distribution. If even in the extended period there is no distribution, the price is not computed.

  1. Non-promotion purchase price

It is computed from purchase and received distributions outside of all promotions. The period are extended gradually, from 3 to 6 and finally to 12 months around the given promotion. As a rule, the shortest period from which a price could be computed is the preferred one. If there are no distributions in either of these periods, the price is not computed.

Calculating discounts for promotions

The discount is computed automatically for each store participating in the promotion and based on the sale price outside of promotion.

Calculating quantity of purchased product during a promotioin

The quantity (of the product) is the purchases and received distributions made during the promotion. The information about the quantity (of the product) is to be found in the report evaluating promotions.