Case Studies Auto Parts Retailer Optimizes Product Assortment with APT's Test & Learn Software

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	Auto Parts Retailer Optimizes Product Assortment with APT's Test & Learn Software

Auto Parts Retailer Optimizes Product Assortment with APT's Test & Learn Software

Technology Category	Analytics & Modeling - Predictive Analytics Functional Applications - Inventory Management Systems
Applicable Industries	Automotive Retail
Applicable Functions	Sales & Marketing Business Operation
Use Cases	Predictive Replenishment
Services	Software Design & Engineering Services System Integration
Challenge	The retailer’s merchandising team wanted to optimize its product assortment within the brakes category. As a part of this effort, the retailer planned to introduce an economy brake kit. However, management was unsure how to accurately quantify the total store impact of the new product, net of potential cannibalization effects on the existing brake product line. Read More
About Customer	The customer is a leading auto parts retailer with over $5 billion in annual sales. The company operates a vast network of stores across the United States, providing a wide range of automotive parts and accessories to both professional mechanics and DIY enthusiasts. With a strong focus on customer satisfaction and product variety, the retailer continuously seeks innovative solutions to enhance its product offerings and improve overall store performance. The company's merchandising team is particularly keen on leveraging data-driven insights to make informed decisions about product assortment and placement. Read More
Solution	Using APT’s Test & Learn for Sites software, the client designed an in-market experiment to test the new brake kit in a representative subset of stores to measure its incremental impact on profit. The software compared 'test' locations, where the new product was introduced, to customized groups of similar 'control' stores, that did not offer the economy brake kit. This methodology enabled the company to isolate the incremental profit impact of the new product amidst the noise of its sales data. APT software combined these significant drivers of performance into a highly accurate model to generate store-by-store sales performance predictions. Targeting the new product introduction to the subset of stores that were expected to perform well, based on APT’s predictive model, the auto parts retailer increased the value of the program by $8.5MM annually. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Functional Applications - Inventory Management Systems

Applicable Industries

Automotive

Retail

Applicable Functions

Sales & Marketing

Business Operation

Use Cases

Predictive Replenishment

Services

Software Design & Engineering Services

System Integration

Challenge

The retailer’s merchandising team wanted to optimize its product assortment within the brakes category. As a part of this effort, the retailer planned to introduce an economy brake kit. However, management was unsure how to accurately quantify the total store impact of the new product, net of potential cannibalization effects on the existing brake product line.

About Customer

The customer is a leading auto parts retailer with over $5 billion in annual sales. The company operates a vast network of stores across the United States, providing a wide range of automotive parts and accessories to both professional mechanics and DIY enthusiasts. With a strong focus on customer satisfaction and product variety, the retailer continuously seeks innovative solutions to enhance its product offerings and improve overall store performance. The company's merchandising team is particularly keen on leveraging data-driven insights to make informed decisions about product assortment and placement.

Solution

Using APT’s Test & Learn for Sites software, the client designed an in-market experiment to test the new brake kit in a representative subset of stores to measure its incremental impact on profit. The software compared 'test' locations, where the new product was introduced, to customized groups of similar 'control' stores, that did not offer the economy brake kit. This methodology enabled the company to isolate the incremental profit impact of the new product amidst the noise of its sales data. APT software combined these significant drivers of performance into a highly accurate model to generate store-by-store sales performance predictions. Targeting the new product introduction to the subset of stores that were expected to perform well, based on APT’s predictive model, the auto parts retailer increased the value of the program by $8.5MM annually.

Impact #1	The software revealed that the new product introduction caused a 12.4% increase in Economy Brake Kit Sales.
Impact #2	The program did not affect overall Brake Kit Sales, as the new product significantly cannibalized Mid-level Brake Kit Sales, causing a 12.2% decline in that subcategory.
Impact #3	The new brake kit introduction generated a 0.9% total store lift due to halo effects on other categories, including economy priced oil.

Impact #1

The software revealed that the new product introduction caused a 12.4% increase in Economy Brake Kit Sales.

Impact #2

The program did not affect overall Brake Kit Sales, as the new product significantly cannibalized Mid-level Brake Kit Sales, causing a 12.2% decline in that subcategory.

Impact #3

The new brake kit introduction generated a 0.9% total store lift due to halo effects on other categories, including economy priced oil.

Benefit #1	The auto parts retailer increased the value of the program by $8.5MM annually.

Benefit #1

The auto parts retailer increased the value of the program by $8.5MM annually.

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Overview

Auto Parts Retailer Optimizes Product Assortment with APT's Test & Learn Software

Operational Impact

Quantitative Benefit