Optimisation of Catalogue and Leaflet Distribution Areas

Added on:
17 November 2020

Despite the constant increase in importance of e-commerce and electronic channels of customer contact, many companies still devote a significant part of their budgets to traditional forms of communication such as flyers, catalogues or in-store leaflets.

Their preparation, printing and distribution entails significant costs. It is therefore important to measure the effectiveness of activities based on printed materials and optimise the use of the budget allocated to such activities. In other words, you have to answer the question: what is the ROI of the activities carried out and where to distribute, when, how often and what is worth distributing to make the ROI as high as possible with a limited budget.

By analysing data from existing distributions and combining them with data from cash-register systems, transactions recorded on loyalty cards, website traffic and data characterising the demographics of distribution areas, it is possible to build a model estimating the impact of printed materials on sales and other KPIs relevant to the company’s business (e.g. new customers registering in the loyalty program).

With the help of the model created, it is possible to predict the impact of a specific type of material at a specific place and time and to carry out reliable simulations of what would be the effect of abandoning planned activities. In other words, it is possible to simulate what would happen if the costs were reduced and the in-store leaflets were not distributed in a certain area. Would the decrease in revenue and margin prove to be higher than the savings on printing and distribution costs? It is also possible to identify areas where distribution would be more beneficial.

The effect of the optimisation is a list of areas with suggested expenditures, in which it is worthwhile to carry out the distribution. The prepared list is always accompanied by a map, which helps to better understand the recommendation. The optimisation can be carried out at the level of a municipality, postal code or smaller defined areas (e.g. sectors used operationally by companies distributing unaddressed mail).

For additional synergy effects, the analysis of distribution of printed material should be combined with a more comprehensive optimisation of other marketing channels. It allows for the recognition of interactions between different channels and the identification of situations in which different channels strengthen their impact and those situations in which distribution channel cannibalisation is observed. This allows you to answer questions such as: whether the in-store leaflets are more effective in combination with internet advertising, geotargeted for a given area, or whether it is an unnecessary duplication of expenses and it is more effective to separate these activities in space and time.

Clients: Leading marketer from retail industry