Building a better bridge between the marketing and supply chain departments

May 25, 2022

Building the bridge between marketing and supply chain

If your marketing and buying teams are not sharing data and plans frequently you are likely missing out on sales. In this article we’ll explain why a tight collaboration is crucial for any D2C brand in order to increase performance. 

Two of the biggest costs on a D2C brand’s P&L is typically cost of goods and marketing spend/customer acquisition. Essentially, supply and demand (generation). There is a lot more that most brands can do to synchronize these two sides of the equation, so that they work in better harmony. 

Marketing departments typically optimize for metrics such as ROAS (return on ad spend) while buying teams focus on e.g. sell-through or gross margin. The risk of isolated KPIs is isolated behavior, but marketing and buying/merchandizing hugely impact each other. Sharing processes and information in a more structured manner opens up opportunities for higher performance on overarching metrics: sales and bottom-line profits. A couple of examples: 

So, our solution to this is a three step approach: 

  1. Set pre-season/long-term sales plans for each individual article, with the best available information at hand, including known marketing initiatives. These then function as a baseline, and if everything (pretty much) follow the baseline it would mean operations will run smoothly
  2. When the articles start to sell, follow up on early signals on how they are trending versus the baseline. The initial sales data can feed into re-forecasting, and the calibrated outlook feed into what needs to be done. With a large amount of articles and a lot of other things to think of, software support to automate read & react typically helps
  3. Take action based on the outlook. Feed marketing with information about what articles need help to catch up with the desired curve, and what articles are selling well as it is. This can help ensure marketing money is being spent wisely 

The outcome is higher bottom-line profits, less overstock for end of season clearance, and overall smoother operations and fewer hiccups in supply chain.

Madden Analytics recently had a webinar together with marketing agency Keywordio on this topic. The full webinar available here 

And, Madden Analytics has the right solutions to support this work - book a demo here to learn more.

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