ORIGINAL COMPANY-CONTEXT PRACTICE
Measure a promotion when stores start with different demand
Original practice scenario: A hypothetical retail team compares promoted stores with other stores and sees higher sales. Propose an evaluation that distinguishes incremental demand from store selection and stock availability.
Written for independent practice using company context; this is not a verified question from a company interview.
A REASONED APPROACH
Model answer.
Define the promotion effect and eligible store-product population before comparing totals. High-demand stores and well-stocked locations may have been more likely to receive the promotion.
Work through it
- Prefer randomized assignment with comparable periods; otherwise document the selection mechanism and examine pre-promotion trends and relevant store differences.
- Measure sales alongside availability, price, returns and neighboring-product substitution, preserving stores with poor execution instead of quietly excluding them.
- Estimate effects with uncertainty and relevant store or product clusters, checking whether gains persist after the promotion and whether nearby sales were displaced.
Tradeoffs to discuss
- A tightly controlled pilot strengthens attribution but may miss rollout constraints; a broader observational study needs more assumptions.
Common pitfalls
- Do not compare only stores that successfully kept the product in stock after treatment.
- A higher promoted-item total is not necessarily higher category demand or durable customer value.