Supply Chain Matters stumbled upon a rather interesting development, one that perhaps provides somewhat of a perspective on today’s economically distressed consumer. By our lens, it is also another reminder to Sales and Operations Planning (S&OP) teams supporting consumer products supply chains that planning for promotional demand spikes based on point-of-sales (POS) data may be fraught with some distorted or inflated data.
The Publix Supermarket chain, primarily concentrated in Florida, which is in a head-to-head competitive battle with Wal-Mart, has implemented new policies regarding the use of coupons among shoppers. According to a published report by the Tampa Bay Times, Publix will limit shoppers to redeeming a maximum of eight of the same coupon per day, per household. There are other noted restrictions, including that if an individual coupon is valued at more than $5, it will require a manager’s approval. The report points to both consumer abuse and shopper feedback as motivating this type of policy.
Several questions come to mind.
How do consumers amass eight of the same coupon? Is this a flaw in the current world of online advertising and promotional offers when digitally savvy consumers have the where-with-all to secure such numbers? From the product demand planning perspective, the question often debated is whether a coupon promotion amounts to a one-time spike or a reflection of consumer attractiveness to that product, and does that indicate a longer-term increase in that product’s demand. One might suppose that S&OP teams would be conducting such debates, particularly the folks representing sales and marketing. Perhaps some of our readers involved in S&OP and demand planning can weigh-in on these questions and whether coupon abuse can be tracked.
Another thought on the potential economic conditions with which Florida or other geographically based consumers are struggling. Is amassing and utilizing such a high number of coupons per household a worrisome economic sign or just a local practice? That, in itself, may be a place to begin.
Perhaps some readers are not struck by such trends. It certainly caught our eye.