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Price Cuts vs. Media Spend: Shock-Based MMM Evidence from Apparel Retail
This report evaluates whether retailers should prioritise temporary price cuts or increased media spend to drive growth. Using a shock-based Marketing Mix Model (MMM) applied to apparel retail data (2019–2024), price and spend innovations are residualised to remove multicollinearity, yielding stable short-horizon elasticities. Results show that discounts dominate for unit growth, while media spend dominates for revenue growth. Scenario formulas and an optimiser are provided for practical planning.