Executive Briefings

BI Technology Shows Wawa Chain that Promising Breakfast Product Was Hurting More Profitable Areas

When Wawa, the $6bn convenience-store chain, came up with a new flatbread breakfast product in 2008, the company's marketing department was flat-out excited. The product had performed exceptionally well in spot testing and seemed more than ready for a systemwide rollout.

At that very time, though, Wawa was trying out a software-based approach to designing and evaluating customer-behavior tests. After it redid the flatbread test using the technology, the breakfast item was killed. "We found it was cannibalizing other, more-profitable products," says Wawa CFO Chris Gheysens.

What made the difference was a more-scientific approach to selecting stores for test and control groups, as well as regression analyses to weed out irrelevant "noise" from test results. 

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When Wawa, the $6bn convenience-store chain, came up with a new flatbread breakfast product in 2008, the company's marketing department was flat-out excited. The product had performed exceptionally well in spot testing and seemed more than ready for a systemwide rollout.

At that very time, though, Wawa was trying out a software-based approach to designing and evaluating customer-behavior tests. After it redid the flatbread test using the technology, the breakfast item was killed. "We found it was cannibalizing other, more-profitable products," says Wawa CFO Chris Gheysens.

What made the difference was a more-scientific approach to selecting stores for test and control groups, as well as regression analyses to weed out irrelevant "noise" from test results. 

Read Full Article