Promotional Inventory Displays : An Empirical Analysis Using IoT Data

We use 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' 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 is causing suppliers to lose substantial sales: placing a display on the floor on an arbitrary week increases the promoted products' sales by 7.2 percent, and placing it on the floor on a campaign week boosts sales by another 2.4 percent. We estimate that the average store could increase the promoted products' revenue during campaign weeks by 6.5 percent by improving campaign execution. Finally, we explore potential drivers of poor campaign execution and discuss managerial implications