Prerequisites for the Creation of a Retail Promotion
The figure shows the basic set-up of a Retail organization with the headquarters (US Retailer Inc.), and their distribution centers and stores. Additionally, there are the (external) business partners: suppliers for merchandise procurement, and customers (wholesale, re-sellers,..), and consumers on the sales side.
A Retail promotion is a marketing activity to increase the sales figures. It can either be initiated by the vendor who offers special conditions, or by the retailer itself, who wants to reduce remaining stock situation or an overfilled warehouse (and therefore offers special conditions). In both cases a retail promotion involves not only the sales side visible to the customer, but the purchasing side, too.
Depending on the intention, the involved parties in this process can be different: An external supplier can deliver the products directly to the involved stores, or the merchandise flow is handled via the corresponding distribution center. In case of stock reduction, the involved parties are the store(s) and their distribution center(s).
First a promotion is planned in advance. This involves defining the articles that are to take part in the promotion, and determining the purchase prices and sales prices. During the planning phase all the data in the promotion can be changed as required.
The solution processes shown in the figure above, Process Overview: Retail Promotion, describe the overall retail process with the intent of executing Retail promotions in store(s). The process starts with planning and maintaining a Retail Promotion (solution process 637), in which the affected products and stores are determined. Additionally the promotion and sales prices as well as the time period is defined, also the merchandise flow will be set up by choosing an item category per item:
An external supplier can deliver the stores directly as well as a distribution center or in case of stock reduction the products will be returned to their distribution center. The result of the subsequent processing is the generation of an allocation table with that the merchandise flow can be controlled. This is described in the Merchandise Allocation (5FL) solution process.
A collective purchase order can be generated based on existing stock transport orders to order the defined quantities in a bundled version and to distribute them to the affected stores (Merchandise Distribution and Collective PO - solution processes 71O).
Each solution process represents a lesson in this unit, and can be completed individually.
This lesson covers the solution process Retail Promotion (637).
In the retail industry, specific terms differ from the standard terms used in other lines of business. The following terms are used synonymously in this document:
| Standard Terms in Lines of Business | SAP S/4HANA Cloud for Retail, Fashion, and Vertical Business |
|---|---|
| Material, Product | Article |
| Material group, Product group | Merchandise category |
| Plant, Location | Site |
Promotions can be created for many reasons, and they are an important part of the regular business of retailers. For example, promotions can be used to execute brand vendor initiated offers, or to celebrate a retailer's anniversary, or to sell off excess stock, and so on.
Quantity planning within the promotion planning process allows you to specify a planned sales quantity for each article for evaluation purposes. You can also plan allocation quantities for supplying the participating sites with promotional merchandise.
When you assign site groups, you can choose whether to assign site groups from the classification system or promotion-specific site groups. The latter can only be created and used within that specific promotion. By contrast, site groups from the classification system can be used in any promotion.
Prerequisites for Promotions
You use the promotion type to specify promotions from a technical perspective. It describes specific characteristics of the promotion and controls subsequent processing by means of default settings and indicators.
The following default data are specified for the promotion header. Lead times are defined in number of days before the promotion start date, and follow-up times are defined in number of days after the promotion end date:
Lead- and follow-up time for purchasing conditions
Number of lead days for promotion announcement
Lead- and follow-up time for article listing
Lead days for goods receipt at store
Allocation table type to control default for allocation table item category
You can define different validity periods for different store groups participating in the promotion. For example, a promotion for swimwear might begin earlier and run for a longer period in stores located in warm regions, than in stores located in cooler regions. If you define different validity periods for different store groups, the system regards the entire promotion period as the period from the earliest start date to the latest end date for all participating stores.
