Reducing Logistic Costs to Increase Margins
An industry leading toy manufacturer was looking to stay profitable on Target.com, in a category that historically has high freight costs for bigger and bulkier active play products. The goal was to switch a large percentage of purchases to online instead of instore, reducing overall freight costs.
We started by implementing and monitoring national internet minimum advertised pricing (iMAP) strategy to control topline selling price erosion. Automating weekly reporting let us track the net shipped margin rates after freight and promotion costs. We then stayed ahead of invisible profitability threats with predictive modeling retailer-driven in-cart promotions that would otherwise erode margin.
By implementing these control measures, we were able to manage the sales mix by margin. This resulted in top line growth and bottom line success.