Promotion Effectiveness Analysis Using POS Data Segmentation
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Solution Overview
Problem
Manufacturers and merchants face challenges in accurately calculating the return on investment for marketing and advertisement efforts, particularly when promotions involve discounts or coupons, as existing methods struggle to isolate and measure the impact of such promotions on sales data.
Innovation Solution
A system and method that collect and analyze point-of-sale data, including merchant and promotion identifiers, to calculate the effectiveness of promotions by comparing transactions with and without promotional identifiers, providing detailed reports on transaction amounts, redemption rates, and consumer behavior.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If traditional marketing measurement methods are used, then marketing investments can be tracked, but the accuracy of return calculation is poor
Solution Approach 1:
The patent introduces a promotion identifier as an intermediary element that links consumers to specific promotions. This identifier is captured at the point-of-sale and used to trace the causal relationship between marketing efforts and sales, enabling accurate return calculation by isolating the promotion's impact from other sales factors.
Solution Approach 2:
The system implements feedback mechanisms by collecting promotion identifier data at the point-of-sale, analyzing redemption patterns, and providing merchants with detailed reports on promotion effectiveness. This feedback loop enables continuous improvement of marketing strategies based on actual performance data.
2Measurement precision
If promotion data is collected and analyzed, then promotion effectiveness can be measured, but system complexity increases
Solution Approach 1:
The patent segments the data collection process by capturing promotion identifiers at the point-of-sale terminal, separating this from the analysis phase. The system divides data processing into collection (at POS), transmission (via network), and analysis (at host computer) stages, making the complex measurement task manageable and implementable.
Solution Approach 2:
The host computer system performs multiple functions: receiving transaction data, calculating promotion effectiveness, generating reports, and providing analysis. This multi-functional approach consolidates what would otherwise require separate systems into a single platform, reducing overall system complexity.
3Loss of information
If detailed transaction data is collected, then consumer behavior can be analyzed, but data processing requirements increase
Solution Approach 1:
The patent extracts only the necessary data elements for analysis - specifically promotion identifiers, transaction amounts, and consumer information - from the broader point-of-sale data stream. This selective extraction focuses processing resources on meaningful data while reducing the overall data processing burden.
Solution Approach 2:
The system performs preliminary data preparation at the point-of-sale terminal by capturing and validating promotion identifiers before data transmission. This preliminary action filters and pre-processes data, reducing the amount of raw data that needs processing at the host computer and improving overall processing efficiency.
Data Source
AI summary
The invention provides systems and methods for collecting point-of-sale (POS) data, and then using this data to determine the effectiveness of a given promotion. The transaction data includes a merchant identifier for each of the merchants and a transaction amount for each transaction involving the merchants. One of the merchants is a promotion merchant that is offering a promotion involving transactions made with the merchant. A portion of the transaction data is aggregated into control merchant aggregated data involving control merchants, where the control merchant aggregated data comprises transaction data obtained other than from the promotion merchant. A characteristic of the purchases is calculated, both for transactions involving the promotion merchant and for the control merchants.