Most major retailers operate a concept of product and price bands linked to demographics, but the vast majority of their promotions are featured nationwide. In many stores and for many products nationwide promotions work well, but in some specific stores they are far less effective. In fact, they could result in no benefit at all to the retailer and brand because they are not hitting the intended target shoppers.
The answer is to only feature the right promotions at the right stores. This not only gives a far better ROI, but it also stops wastage of promotional materials and giving margin away unnecessarily. Our ticketing software, NetTickIT, has been designed to manage targeted promotions like this for years and some, but not all, of our customers use this feature. I think this is about to change.
Tesco (not a current customer of ours) are set to launch a wave of price promotions and range reviews that target customers based on the affluence of the areas they live in (for example, one set of promotions go to the less well-off areas in response to actions from the likes of Lidl and Aldi, whereas a different set of promotions go to more affluent areas where the targets are Sainsbury’s and Waitrose). Tesco are starting this strategy in 300 stores.
In my opinion these types of targeted in-store promotions will very soon become the norm for all major retailers because offers need to be more effective.