Promotion Lift and Cannibalization Calculator
A promotion rarely delivers its headline lift. Part of it comes from sister items on the shelf and part is demand stolen from the weeks after the event. This calculator separates gross lift from net incremental units and shows whether the promotion actually pays.
Your numbers
Expected demand without the promotion.
Increase over baseline during the promotion.
Demand brought forward from the weeks after the event.
Display, listing fees, marketing.
Your results
Planning model. Cannibalization and pull-forward percentages should come from your own post-event analysis, not from defaults.
Net promotion profit vs lift
Sweeps Promotion lift from 0 to 200, holding your other inputs fixed.
Promo effect from your own data
Optional: we can estimate lift and dip factors from your ERP sales history.
Optional. The tool and every export work without this. No spam.
How to use it
Enter baseline weekly demand from your statistical forecast without promotions, the duration and the lift measured in past events of the same type. Set cannibalization and pull-forward as a percent of the gross lift, then the regular unit margin, the discount per unit and fixed costs. Read net incremental units for the demand plan and net profit for the commercial decision. Sweep the lift in the chart to see the break-even.
- Use baseline, not last year's total with promo
- Measure cannibalization at brand or category level
- Plan the post-promo dip explicitly
- Close the loop with actuals after each event
The logic
Gross incremental units equal baseline times weeks times lift. Cannibalized units and pulled-forward units are fractions of that. Net incremental is the remainder. Profit at the brand level is net units times regular margin, minus the discount given on every unit sold in the promotion (baseline units too), minus fixed costs. Baseline units would have sold anyway, so the discount on them is pure cost.
Example
Baseline 2,000 per week for three weeks gives 6,000. A 60% lift is 3,600 gross units. Losing 15% to sister items and 20% to pull-forward leaves 2,340 net units. At a margin of 4.50 that earns 10,530, but a 1.20 discount on 9,600 units costs 11,520, and fixed costs are 3,000, so the promotion loses about 3,990. A deeper lift or a smaller discount is needed.
Common mistakes
Planning the lift but forgetting the dip afterwards causes overstock and later shortages. Treating the lift as a constant ignores that deeper discounts show diminishing returns. Ignoring the discount given on baseline units flatters almost every promotion. In the supply plan, remember that promotions are also a sell-in event, so retailer forward buying can distort the shipment pattern.
Frequently Asked Questions
What is promotion lift?
The percentage increase in sales during a promotion compared with the baseline expected without it. It is usually measured per item, depth of discount and tactic, such as display or feature.
What is cannibalization in a promotion?
Sales of the promoted item that come at the expense of other items from your own range. At brand level those units are not incremental.
What is pull-forward?
Customers buying earlier than they otherwise would because of the promotion, which produces a dip in the weeks afterwards. It reduces the net gain.
How do I get baseline demand?
Use a statistical forecast built on promotion-cleansed history, where promoted weeks are flagged and adjusted, or a regression that includes a promotion variable.
Netray can compute baseline, lift and post-event dip from your ERP's order history so promotion factors in the plan are based on actuals.
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