Welcome to LTP - Advanced Analytics & Business Consultancy

May 23, 2023

When prices rise due to inflation, the value of money decreases. This means companies must pay more for goods and services while receiving less in return. This can lead to reduced profit margins, higher costs for customers, and decreased demand as people are less able to purchase goods or services. Additionally, when inflation increases too quickly it can lead to higher interest rates – which further reduces purchasing power and hinders business growth.

Higher inflation typically means higher awareness about prices and more thoughtful purchases.

One of the key impacts for businesses is the demand for investment in prices to maintain competitiveness.

This requires a continuous and prompt reassessment of needs and priorities, which can be achieved using advanced analytics.

Analytics can help organizations monitor changes in prices and make informed decisions about adjusting their procurement strategies to manage inflationary pressures. For example, through an analytical simulation of different scenarios, companies can make decisions that minimize the overall risk of the operation.

Category management to the rescue

Fortunately, there are measures that businesses can take to mitigate the effects of inflation. One such measure is category management.

By leveraging data-driven insights into customer preferences and market trends, companies can optimize their category portfolios by adjusting strategies accordingly.

This ensures that businesses remain competitive by providing customers with value-based products at reasonable prices.

Companies can also use this information to adjust promotional campaigns or develop new product offerings that better meet customer needs and demands without compromising profitability.

Here are some examples:

  • Price optimization – How to target prices?
  • Promotion management – When is a good time to do a promotion? check and evaluate the purpose of each promotion: awareness / store traffic / commercial pressure / competitor response /
  • Product attribute analysis – What features are driving the sales of my category? Is it the price, brand, color, size or anything else?
  • Brands management / product cluster identification – Which products should go together to maximize their potential?
  • Product-store location – Where should we place each product at store shelf?
  • Understand customers and customer segments – Who is buying what? How often each product is bought?
  • Better commercial forecasts – Have an informed view towards the market capacity to absorb stock.

The benefits of Advanced Analytics

The use of analytics in category management allows organizations to make informed decisions about their procurement strategies.

Analytics can provide a detailed view of spending patterns, supplier performance, and market trends, enabling organizations to identify areas for cost savings through optimized inventory management or improved supplier relationships.

For example, by analyzing data on past spending, organizations can identify categories with high spend and understand the underlying drivers of this spend. This information can then be used to negotiate better deals with suppliers and reduce costs.

One of the main goals of category management is to allocate the most suitable product at each location and that means to understand the location and customer (target), product (attributes and characteristics) and to understand the interactions within the products (how diversity and cannibalization work at each category). At this point, advanced analytics can help to identify areas of inefficiencies in their procurement processes, such as duplicated efforts or missed opportunities for consolidation, and provide a roadmap for improvement.

Additionally, advanced analytics allow companies to track changes in price points over time in order to accurately forecast future trends – which helps them plan ahead for potential fluctuations in demand or supply chain disruptions caused by inflationary pressures. Ultimately, these insights empower businesses to make informed decisions about how best to manage their category portfolios in response to changing macroeconomic conditions like inflation.

By: Bruno Batista

Service Applied
Asset management
Industry Applied
Consumer products Retail & e-commerce
Delivery Mode Applied
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