According to a survey in The Grocer 39% of retailers want an end to harmful price promotions. Perhaps it’s not surprising when according to the Institute of Promotional Marketing £40bn was spent on a range of price discounting promotions in a year. That’s a lot of margin to give away.
Add the pressure from Which? about misleading offers plus the increasing distrust that shoppers feel towards promotions and things have to change.
Welcome to Smart Promotions
The retail world is changing fast and the number and type of promotions are changing too. Retail is moving away from inflexible high volume traditional promotions to tailored and more effective smart promotions.
So what is a Smart Promotion? The definition of a smart promotion starts with the impact that it has on shoppers.
A smart promotion is a ticket or piece of signage that gives shoppers sufficient information and incentive to make a buying decision at the shelf edge that they would not otherwise make. A perfect smart promotion is not solely dependent on discounting to achieve the sale.
Price is obviously important but discounting plays a much less dominant part in smart promotions than in traditional promotions. The key point is that shoppers are looking for more than one reason to buy and the more appropriate reasons that you can give them the higher the probability that they will buy.
We know that according to a Popai survey 76% of buying decisions are made in stores regardless of whether shoppers have been researching online. That makes the shelf edge and smart promotions critically important to capitalise on.
Reasons to buy
There are many reasons to buy that shoppers will respond to with and without a discounted price. For example a smart promotion could be as basic as using the word “New” on a product label or as complex as a product specification with pictures, customer reviews, QR Codes, rating and related products. That’s the same information and techniques that Amazon so successfully uses to get shoppers to buy now. Adjust the elements for an in-store printed environment and the same techniques form the basis of smart promotions and tickets that sell.
Shelf edge signage – better than an Amazon screen
In addition to factual information many smart promotions also contain high impact marketing messages. They could be as simple as “great with red wine” by a prepared meal or “featured in the Daily Mail” on a dress. The key point is that these helpful marketing messages must be easy to test in selected stores and easy to change quickly. The marketing messages need to be kept fresh and relevant to shoppers at each individual store to have the most impact so a range of messages may be needed. The knowledge gained by testing which messages gave the best results combined with the ability to have different messages in different stores is something that retailers with stores can do – but Amazon can’t. So this technique is important for stores to capitalise on.
Execution is everything
87% of retailers say that revenue growth is their top priority and they are focusing on growing sales in stores. We’ve spoken to many retailers who want to adopt the smart promotions approach as part of their plans but their existing ticketing or signage production processes are not flexible enough to implement it. Up until recently ticketing has not been a high priority for investment because the high cost of implementing price discounts on top of traditional promotions swallowed up a big chunk of the budget. That’s now changing rapidly. Smart signage management software is increasingly being seen as essential to support smart promotions and becoming a high priority. Ticketing has moved from an overhead cost to an investment that can deliver a strong ROI by growing sales.
If you have less than 2 minutes to visualise how smart promotions can increase sales see the Tickets That Sell video. We’d also love to tell you more about how you can implement smart promotions in your stores in just a few weeks. Contact us.
Moving away from traditional promotions will help you increase sales and maximise margins.