Promotional Inventory Displays: An Empirical Analysis Using IoT Data

32 Pages Posted: 15 Apr 2020 Last revised: 15 Oct 2021

See all articles by Jacob Z. Zeng

Jacob Z. Zeng

University of Texas at Austin - Red McCombs School of Business

Ashish Agarwal

University of Texas at Austin - Red McCombs School of Business

Ioannis Stamatopoulos

The University of Texas at Austin - McCombs School of Business

Date Written: March 22, 2020

Abstract

We use internet-of-things (IoT)-generated data on the real-time location of about 15 thousand displays in about 5 thousand stores of a Fortune 500 retailer, paired with the stores' point-of-sale (POS) data between September 2017 and March 2018, to measure the operational execution and effectiveness of promotional inventory display campaigns. We find that campaigns are poorly executed: 29 percent of displays never made it to a store's floor, and those that did only spent 62 percent of the campaign there. We also find that poor execution deprives targeted products of substantial sales: placing a display on the floor on an arbitrary week increases the targeted products' sales by 7.3 percent, and placing it on the floor on a campaign week boosts sales by another 2.3 percent. Finally, we project that stores would decrease targeted products' dollar sales during campaign weeks by 3.1 percent if they discontinued display campaigns as currently executed, and they could increase these products' revenues during campaign weeks by up to 6.9 percent by improving display campaign execution.

Keywords: IoT, promotional inventory displays, inventory record inaccuracy

Suggested Citation

Zeng, Jacob Zijian and Agarwal, Ashish and Stamatopoulos, Ioannis, Promotional Inventory Displays: An Empirical Analysis Using IoT Data (March 22, 2020). Available at SSRN: https://ssrn.com/abstract=3559018 or http://dx.doi.org/10.2139/ssrn.3559018

Jacob Zijian Zeng

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Ashish Agarwal

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Ioannis Stamatopoulos (Contact Author)

The University of Texas at Austin - McCombs School of Business ( email )

2110 Speedway B6000
Austin, TX 78705
United States

HOME PAGE: http://https://sites.utexas.edu/yannis-stamos/

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