Formulate partners with Retail Rendement in Netherlands expansion

Thom Iddon-Escalante

Marketing Director
Meet Lennart. He's the Founder of Retail Rendement, a retail optimisation consultancy located in Harderwijk, the Netherlands. He's spent years working with major Dutch retailers, and he recently came aboard as a Formulate partner.

A Career in Retail

On completing a degree in Business Administration, Lennart turned his hand to retail, cutting his teeth as an Assistant Buyer at DIY chain Intergamma. He then undertook various category roles before specialising in format management, where he plied his trade on assignments at Etos, Prénatal, Blokker and Carpetright.

He has long nurtured a passion for innovation, overseeing the implementation of novel technologies to enhance customer experience, like in-store ordering points and light-guided navigation.

Most recently he directed his considerable experience towards consulting, helping major Dutch retailers save time and resources by optimising operations.

Retail in the Netherlands

Measured per capita, the Netherlands has more stores and more store square meters than anywhere in Europe.

This means consumers have plenty of choice; it also means retailers face stiff competition. In most verticals at least two major retail players and a host of smaller and/or regional stores compete for market share.

In Lennart’s view, in this environment retailers need to “continually assess store performance and traffic, and react quickly to remain competitive”.

Promotions in the Netherlands

All this goes some way to explaining why the Netherlands has developed into a classic high-low promotion market. Standard pricing remains relatively high, but steep discounts are commonplace. Promotions get refreshed often – typically every 1-2 weeks – and promotion share of sales can easily reach 50%.

Partnering with Formulate

Because promotion volume and frequency is so high, more time and resources get spent operating promotions than evaluating and enhancing them. Since these pressures aren’t likely to subside any time soon, Lennart is confident that Dutch retail is ready for a solution that provides quick, accurate, and actionable promotions insights.

With this in mind here are 3 aspects of Formulate’s solution that Lennart feels offer most promise for Dutch retail:

#1 Baseline Accuracy

Baselines underpin all promotions analysis. When baselines aren’t accurate, it’s impossible to say whether or not optimisation efforts are working.

Lots of retailers resort to baseline modelling approaches like the mean of previous 10 non-promotion weeks, or the same non-promotion period as last year. These are relatively easy to implement, but they often prove woefully inaccurate.

Formulate’s solution instead enables dozens of machine learning and statistical models to compete to make the best prediction. The most accurate model is selected. This is fully automated, and conducted both at product and store level.

This has proven to be between 2 and 10 times more accurate than the 3 baseline models retailers typically employ.

Accurate baselines enable retailers to quickly and confidently eliminate promotions that don’t drive revenue, profit, or traffic. They facilitate better supply chain management – cutting wasteful over and under stocking scenarios. And they enable retailers to work more proactively to design new promotions that meet their objectives.

#2 Price Optimisation

One key component of promotion design is pricing. Formulate provides pricing recommendations to optimise every promotion to achieve its specific objectives. It helps users answer questions like: At which price will this promotion maximise revenue, profit or both revenue and profit?

Given the pressure Dutch retailers face to discount steeply, knowing precisely when further discounts won’t generate more ROI can prove a major source of savings.

#3 “Truelift” – the best single promotion KPI

To cap it all, Lennart thinks Formulate’s measure of TrueLift – that is to say a promotion’s net profit or loss once factors like switching, stockpiling, and basket effects are accounted for – provides the crucial insight Dutch retailers need to evaluate promotion performance and make data-led decisions under time and resource pressure.

Retail Rendement's wider plans

From Lennart’s perspective, partnering with Formulate aligns with Retail Rendement's wider mission: to help retailers work proactively with the largely untapped data resources they possess, and to improve the effectiveness of existing brick-and-mortar retail operations with a focus format management, store location, and omnichannel concepts.

About Formulate & Retail Rendement

Formulate is a Stockholm-based retail analytics company specialising in promotion optimisation backed by, amongst others, Amsterdam-based VC HenQ. Retailers use Formulate’s tools to plan, simulate and forecast the impact of their promotions. Formulate supports retailers with advanced promotion recommendations, live reporting, and custom integrations with their existing systems. Become a Formulate partner.

Retail Rendement is a Dutch retail consultancy specialising in optimising store and promotion performance. Retail rendement offers data driven insights in combination with commercial concepts and supports retailers implementing the new way of working by adjusting organisations, workflows, processes or project management.

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