As Sweden’s leading independent online grocery retailer, Mathem is a technology-driven e-commerce supermarket offering grocery, pharmacy, and kitchen products. Founded in 2006, Mathem owns their entire value chain and self-distributes from six distribution centers, delivering high-quality products directly to their customers’ homes.
The challenge: Efficient promotion planning at scale
Mathem has been on a growth trajectory for many years, and that growth accelerated during the pandemic as customers avoided in-store shopping in favor of safer, more convenient delivery options. However, consumers eventually made a gradual shift toward pre-pandemic purchasing behaviors. Simultaneously, rising global inflation has driven customers to actively seek less expensive alternatives to their favorite products. These factors, coupled with the rising cost of goods sold, have negatively impacted sales for many retailers.
Before implementing RELEX, Mathem manually managed their promotional planning through spreadsheets and a legacy ERP system. These processes rendered a heavy workload for their teams, limiting the time planners could spend managing more valuable and productive tasks. As the company scaled, their previous systems proved incapable of supporting their most critical business goals — at a time when efficient promotion management, for example, was crucial.
Manual planning also left Mathem unable to demonstrate the effectiveness of their promotions to their vendors. Without a singular source of insight, their team’s decision-making abilities were inhibited; it was exceedingly difficult to accurately measure performance, interpret results, and optimize future promotion plans.
The project: Implementing a standardized promotion planning system
In 2020, Mathem began using RELEX to create automated forecast and replenishment plans and drive improvements to their supply chain planning accuracy. The company then implemented RELEX promotions planning in autumn of 2022 to give their promotions strategy an edge as customer shopping patterns shifted, and the online grocery market became even more competitive. The solution was implemented across their different distribution centers to service their online sales channels.
Having created a strong business case for a promotion optimization solution, Mathem identified several key goals for their promotion planning processes. They wanted to implement a standardized, automated solution that would provide valuable insight into several areas, including:
- Promotional campaign profitability
- Stockpiling, cannibalization, and halo effects
- Successful campaign standards
- Time spent on promotional planning
- Promotional forecasts
- Future campaign planning
The results: Optimized and automated promotion planning
With a unified RELEX forecasting, promotions, and replenishment solution in place, Mathem has been able to strategically plan, optimize, and evaluate their promotions, seeing measurable results within six months of implementation.
The RELEX promotions solution resulted in promotion planning time savings of 20% for their commercial teams. Likewise, Mathem’s supply chain planners have benefited from using the integrated promotion forecasts. Through RELEX, Mathem saw a 55% improvement in their supply chain planners’ end-to-end promotion processes.
The ability to leverage machine learning technology to analyze promotional data and supply chain insights has driven significant improvements to their availability and their sales. Overall, Mathem’s share of profitable promotions increased by 56% (21 pp).
A clearer picture of their promotional campaigns and supply chain enabled them to better understand the factors behind a successful campaign. Mathem reduced the number of unprofitable promotion campaigns they ran in 2022 by 17%. Even with this reduction to their overall promotions, optimizing their plans led to a more than 20% increase in gross promotional sales.
The ability to more accurately measure stockpiling, switching, and halo effects resulted in a true lift sales improvement of more than 32%. Further, the company used these metrics to demonstrate the effectiveness of their promotion campaigns to vendors, enabling more win-win opportunities for both parties.
With confidence in their highly accurate promotion, forecasting, and replenishment plans, Mathem was able to demonstrate the value of investing in their promotions to their suppliers with the support of better data, new metrics, and a deeper understanding of both baseline sales and promotion effectiveness.
“RELEX has proven essential for securing the right allocation of promotion investment that serves us, our suppliers, and most importantly, our customers” says Carl-Johan Sagner, Mathem Promotional Strategy Manager.
Mathem also cited the responsiveness of the RELEX team as a key component to their success. In addition to a quick implementation and time-to-ROI, Mathem saw improved collaboration and communication between departments, resulting in better, more informed business decisions.
“RELEX gave us an automated, integrated system that provides our teams with a much deeper understanding of the factors behind successful campaigns,” says Sagner. “We’ve seen sales on our promoted items increase more than 20% since adopting the RELEX solution. Working with RELEX has really helped us to run our promotions more efficiently and profitably.”