Direct and indirect effects of retail promotions on sales and profits in the do-it-yourself market

Dirk Van den Poel, Jan De Schamphelaere, Geert Wets
2004 Expert systems with applications  
In this study, we measure complementary effects of retail promotions for a large number of product pairs. For this, we make use of market basket analysis. We argue that failing to take these cross-effects into consideration, may lead retail managers to severely underestimate the impact of promotional efforts. Moreover, we provide guidelines for optimizing promotional strategies. To this end, we introduce lift, a measure for the strength of a complementary relationship, as a moderator in
more » ... ng the variation in complementary effects of retail promotions across product pairs. We show that the stronger the complementary relationship (higher lift), the stronger is the cross-impact of retail promotions. However, in case of simultaneously promoting two complementary products, larger promotional impact is seen when weaker product pairs (lower lift) are considered.
doi:10.1016/j.eswa.2003.12.003 fatcat:ei5m4mkaqnbtrldmn5yomx6kqa