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Leverage Retail Techniques to
Increase LBM Pro Customer Sales
Pricing, promotions, and
merchandising techniques rooted in
human psychology and consumer
behavior analysis, and historical
buying patterns are effective for
retail and pro clientele alike.
With the recent release of Epicor®
BisTrack™ 5.0, LBM pro dealers can
now choose from a suite of loyalty
promotions options. Moreover,
LBM pro dealers can now dive
deep into their data to look for
opportunities to increase revenue,
loyalty, and profitability.
The merchandising, data mining, and consumer behavior analysis tools used
extensively by top retailers to increase revenue, loyalty, and profitability need not
be confined to the realm of B2C (business-to-consumer) business. Increasingly,
these tools are becoming available to B2B (business-to-business) companies—and
LBM pro dealers are no exception.
”It’s only human nature to want a good deal. LBM
pro dealers can now use analysis tools to optimize
pricing, promotions and loyalty programs.”
- Doug Smith, Director of Product Management & Marketing, Epicor Retail
LBM dealers can use Epicor BisTrack 5.0 business intelligence dashboards and tools
to analyze the profitability of individual customers, the ‘market basket’ of products
their customers buy, and the effectiveness of promotions.
Use simple data mining techniques to understand
complex buying behavior
“Retail businesses may have set the standard for mining data to drive consumer
promotions,” says Smith. “Many retail data mining and merchandising techniques
can be readily applied in B2B scenarios, such as LBM suppliers, to understand the
pro customer’s buying habits and capitalize on their preferences.”
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Customer, Products, and Promotions Analysis for LBM
“Our retail products have won accolades as 2015 Best in Biz Awards and #1 POS
software for specialty hard goods retailer,” Smith continues. “We are delighted
that we have been able to share some of that functionality with another Epicor
product line, Epicor BisTrack, so that LBM pro dealers can make use of them too.”
Graham Rigby, BisTrack product and sales director, echoes Smith’s sentiment.
“BisTrack now offers a new suite of business intelligence tools combines Market
Basket, Promotions Affinity, Inventory Double Ranking, and Customer Stratification
analysis tools into a powerful bundle. It gives BisTrack’s pro dealer customers
insight to help them identify their best customers and leverage data about
customers’ buying habits to drive sales.”
Market Basket of what your customers buy together
“We really appreciate Market Basket
and its ability to identify items that
have historically sold together so
that we can increase sales and
margins. The results are often
surprising. We recently looked at
what to merchandise with drop
cloths and, based on Market
Basket analysis, we created an
end-cap display with drop clothes
along with joint compound and
high-end paint brushes. Sales over
the weekend increased by 5% for
all items displayed.”
Carolyn Epstein,
CFO,
Dr. Ike’s Home Center
The first analysis tool, Market Basket, allows you to mine historical sales data,
looking at particular items and seeing what sells with them. Then, by grouping
items that frequently sell together in your promotions and on your shelves, you
can increase sales of multiple items—as well as margin—by cross-selling, upselling, and offering incentives for additional purchases.
“Market Basket is a very powerful tool that identifies items that customer purchase
at the same time. I can then merchandise those items together to increase
sales,” explains John Fix III, president of Cornell’s Hardware. “My managers and
I are exposed to data and metrics we didn’t have before. We are more aware
of business and find new opportunities for improvement. It’s a fantastic tool for
improving business performance.”
Promotions Affinity analysis helps measure
promotions performance
Jan Carlzon, former CEO of Scandinavian Airlines Systems, recognized the power
of incremental improvements when he said, “You cannot improve one thing by
1000%, but you can improve 1000 little things by 1%.”1
Promotions Affinity analysis helps you track the results of the small incremental
improvements you make each and every day to determine which are most effective.
With Promotions Affinity analysis, you can analyze the outcome of promotion,
pricing, and merchandising tactics such as coupons, sales flyer items, signage, and
shelving design. Try different tactics, and then analyze what sold, as well as what
sold with it, to determine which techniques work best.
Gaunt, Neville. (2015, March 4). How’s your 2015 Big Idea Going? Retrieved from The SAS Group LinkedIn https://www.linkedin.com/topic/company/the-sas-group
1
epicor.com/BisTrack
Inventory Double Ranking helps plan procurement
and promotions
Customers also bought...
By simultaneously classifying your inventory by two metrics—gross profit dollars
and inventory turns—you can gain insights for purchasing, pricing, promotions, and
merchandising policies and practices. Use the double-ranking system to decide how
to deal with slow-moving and unproductive inventory, to predict which products
can withstand price increases, which products need adjustments in stock levels, and
which combination of products to cross-sell and up-sell in promotions.
Customer Stratification helps understand the true
cost of servicing customers
17%
38%
12%
31%
The Epicor Market Basket tool mines
As an LBM pro dealer, profit isn’t determined solely by the cost and sell price of
your inventory items. While GMROI is a better indication of the profitability of your
inventory, it still doesn’t account for all the costs of servicing your customers. As a
pro dealer, quote conversion rates, delivery costs, return rates, AR days-to-pay, and a
whole host of other factors contribute to “pocket margin”—the money left in your
pocket or on your bottom line—for each customer.
“One goal of our Customer Stratification tool is to identify and retain your highly
profitable customers,” says Rigby. “But it also helps identify customers you can
move to an A customer through loyalty programs, as well as your least profitable
D and F customers with whom you may be able to renegotiate and change
habits that are eroding margins.”
historical sales data to show you
which products have sold alongside
the item you’re analyzing.
Use data mining tools in tandem for peak
performance and growth
Used in tandem, the new Customer, Product, and Promotions Analysis bundle of
tools can help LBM dealers be smarter and more profitable with their promotions,
procurement, and customer management policies and tactics. A typical analysis
sequence might include the following steps:
1.Investigate products in each Inventory Double Ranking classification to identify
inventory control, pricing changes, and promotions opportunities.
2.Use Market Basket analysis to identify high margin or high turnover products that
frequently sell with the item you want to promote.
3.Use Customer Stratification analysis to select which customers to target for
various promotions to cross-sell or up-sell additional product lines.
4.Launch a targeted campaign involving promotions and/or merchandising.
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5.Use Promotion Affinity analysis to measure the results of promotions, so that over
time, you can train your staff and fine-tune promotions for optimum results.
Increasing Sales
Over time, this disciplined approach will help you make a multitude of small
improvements that have an overall significant impact on your top and bottom lines.
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Tip for Promotions Planning:
Products with high profitability
and moderate sales volume are
great promotion opportunities.
Use Market Basket to find high
turnover items to promote
alongside them.
Increasing Profits
About Epicor Software Corporation
Epicor Software Corporation drives business growth. We provide flexible, industryspecific software designed around the needs of our manufacturing, distribution,
retail, and service industry customers. More than 40 years of experience with our
customers’ unique business processes and operational requirements are built into
every solution―in the cloud, hosted, or on premises. With this deep understanding of
your industry, Epicor solutions manage complexity, increase efficiency, and free up
resources so you can focus on growth.
Contact 888.463.4700 | [email protected] | epicor.com/BisTrack
This document is intended for informational purposes only. Nothing herein should be considered a representation or warranty regarding our services or products, which are only provided subject
to and governed by the terms of our customer service or license agreements. Epicor, the Epicor logo, Business Inspired, and BisTrack are trademarks or registered trademarks of Epicor Software
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