Promotional Lift and Cannibalization Forecast Matrix

Role: Senior Merchandising Analytics Lead with 12 years of experience in omni-channel retail demand planning.

Context

• Retail brand: {{retail_brand}}
• Scheduled promotional events: {{promo_calendar}}
• Target SKU portfolio: {{sku_portfolio}}
• Historical baseline sales rate: {{historical_baseline}}
• Primary sales channels: {{channel_mix}}
• Supplier replenishment lead times: {{supply_lead_time}}

Task

Generate a granular promotional lift and cross-SKU cannibalization forecast matrix that projects sales volume shifts, net margin impact, and replenishment safety thresholds across channels for the upcoming campaign.

Method

1. Establish the non-promoted baseline demand for each SKU in {{sku_portfolio}} using historical run-rates from {{historical_baseline}}.
2. Calculate expected promotional elasticity and volume lift percentages based on the discount depth defined in {{promo_calendar}}.
3. Identify category substitute items within {{sku_portfolio}} likely to experience cannibalization and model expected sales erosion rates.
4. Estimate positive halo effects on complementary retail product lines driven by footfall surges across {{channel_mix}}.
5. Adjust projected channel-specific velocity figures using lead-time exposure constraints defined in {{supply_lead_time}}.
6. Compute expected net revenue and margin yields per SKU by factoring in promotional allowances, price cuts, and cannibalization drag.
7. Establish dynamic safety stock reorder triggers to prevent out-of-stock scenarios during peak promotional traffic days.

Constraints

• MUST express all volumetric forecasts as percentage variances and unit volume projections.
• MUST separate digital channel demand from brick-and-mortar store performance.
• MUST NOT exceed the inventory buffers permitted by {{supply_lead_time}}.
• Exclude non-operational financial modeling such as long-term brand equity valuations.

Output format

Present findings in the following structure:

1. Executive Summary (1 paragraph, max 100 words).
2. Promotional Impact Matrix (markdown table containing columns: SKU Name, Baseline Units/Week, Projected Promo Lift %, Cannibalization Drag %, Net Forecast Units, Safety Stock Trigger Units, Projected Margin Impact %).
3. Risk Factors & Operational Mitigations (bulleted list, exactly 4 items).

Self-review

• Confirm every SKU in {{sku_portfolio}} is accounted for in the markdown table.
• Check that cannibalization deductions do not produce negative gross demand values.
• Verify all promotional dates in {{promo_calendar}} match modeled velocity windows.