Promotion Management for Retailers

What is promotion management

Promotion management is a type of interaction between a customer and a vendor with the help of discounts. The vendor uses promotions to draw customers' attention to products and services and thus encourage buying.
Creating promotions based on guesswork won’t take you anywhere but down, and on the contrary of attracting customers to stay, you’ll actually be pushing them away. Contrary to popular belief, many of these promotions, including your own, are working against you since they’re pushing shoppers away from becoming or staying loyal because these promotions are set from random conclusions that companies just pray will give them a positive outcome.

Our current struggle

  As the category manager of a retail company, I’ve struggled a lot with keeping loyal customers since I can’t seem to get my brand image quite right. I feel that the root of my problem lies in my useless attempts to create promotions. However, after a bit of research, I’ve decided to try out a promotions management tool, which utilizes prescriptive analytics to create the most effective promotions possible that will assist me with reaching my goals. Some of the data include, but is not limited to, information regarding what impacts shoppers’ decisions to make a purchase. This is due to a prediction of interest.  

An uknown retailer

Consumers today have complete price transparency. They can compare the prices of any store at any time. Therefore, it’s never been more crucial to have the most competitive prices in order to win them over. However, it’s also never been more challenging to do so since each rival keeps offering promotions, one better than the next.

However, contrary to popular belief, many of these promotions, including your own, are actually working against you since they’re actually pushing shoppers away from becoming or staying loyal because these promotions are set from random conclusions that companies just pray will give them a positive outcome.

Let’s take a more in-depth look at promotion analysis.

Choosing the right categories

The assortment management is a task both for category manager and marketing manager: what categories to promote in order to maximize the footfall?
Divide the inventory into four parts depending on their market penetration and sales frequency.
Feel free to launch promo campaigns for the categories marked in green.
There’s no reason to set massive discounts for a revenue builder — they are performing great as such.

Types of promotions

In retailing, we focus more on sales promotions that gain the attention of various buyers. It’s especially useful when you’re introducing an item onto the market, or when it hasn’t yet gotten the amount of recognition that you had been looking for. In other words, you want to boost the sales of a product.

1. One way to do so is through the consumer, which is also known as consumer sales promotion. It can be used for a variety of reasons starting from getting their input based on a sample item to them signing up for something in order to get a gift. Regardless, the result should be getting a response from the customer that way they’ll make a purchase immediately or will be aware of the product, thus bringing more attention to it.
2. Through trade sales promotion, items have a better chance of moving around if the dealer, distributor, etc. is given a reason to work more efficiently, such as from a discount.

These two can be accomplished through some sales promotions including, but not limited to:

• Discounting
• Gifting
• Coupons
• Financing
• Sampling
• Bundling, etc.

You can optimize these promotions by using data about what actually works. This is accomplished through thorough analysis, thus enabling you to make conclusions and improve the various promotional approaches.
In retailing, we focus more on sales promotions that gain the attention of various buyers. It’s especially useful when you’re introducing an item onto the market, or when it hasn’t yet gotten the amount of recognition that you had been looking for. In other words, you want to boost the sales of an item.

Competition-based promotions

The promo campaigns are based on product cost, competition, and business strategy. Here are some stages of competition-based promos.

1. Monitoring the promotions of your competitors
   This helps you gain insight into how they typically promote items. You can then make an analysis that will be beneficial to you in the future.
   It’s crucial to be extremely knowledgeable in the market of the entire category. This means that you need to follow up on the stock availability, prices, new offers, deals, promotions, etc.
2. Introducing your promotions
   Through the analysis, you’ll have a deeper understanding of when and how your rivals set their promo campaigns, which will in, turn, allow you to set a promotion similar, but better than theirs.
3. Tracking your performance
   You can watch and see how effective the predictive analysis was and make adjustments accordingly, if necessary.

There are a number of steps that you can take to ensure that you’re making a profit along with building a stronger loyal customer base:

• Draw in customers with deals that are actually relevant to them. Otherwise, things won’t look too good for you in the long run. Therefore, make sure that you’re tracking and analyzing which ones do and don’t work that way you can promote more productively. With a marketing automation software, you’re able to make a scientific promotional analysis from all of the data collected in order to figure out what would work best. This scientific analysis is made from historical data, that way from past occurrences, you can predict what would work now to help you reach your goals as well as carry out a strategy. However, we’ll get more into the software a bit later.
• Keep in mind that social media is becoming a stronger force as a marketing vehicle. In fact, 55% of online shoppers that purchased something on social media claim that daily deals are important. So apart from word-of-mouth, there are a number of other factors that influence a consumer’s decision to make a purchase, such as social media, that you should take into account.

Monitor promotions with promotions software

Ideally, you want to find one that doesn’t rack your brain, but it should be fact-based, that way you can create a useful plan from well backed up predictions as well as track how those promotions are doing in regards to your brand image and your customer loyalty.

Competera takes advantage of established retailer strategies combined with the self-learning models in order to suggest you the best promotion so that you can get the best outcome. It comes with other features including imitations of potential situations as well as direct comparisons with your rivals through effective visuals. Therefore, not only can you make a prediction, but you can also have a few lined up that way you can compare them and see which one would be the most beneficial towards reaching your goal as well as implementing your strategy.

Therefore, now you can actually work on building promotions with the confidence that you’ll be able to satisfy your customers in the process.