Your promotional program is what we would call a retail fundamental and is something that you must get right, every single time. The steps to implementing a promotional program need to be seamless, intuitive and easy to follow by all members of the team, especially if you aim to have a seamless connected customer journey (eg. from online to in-store or in-store to online).
Often we see disconnected promotional programs that have been poorly considered, communicated and executed, with marketing material not put in the right places, products not being displayed with the right information (or in a prime location) or special offers being hidden in plain sight with no ticketing. These all lead to lost sales conversion opportunities in addition to wasting not only marketing dollars but also your teams time and energy.
To make clear, a promotional program is called different things in different retailers. A promo cycle, a promotional campaign period, but essentially:
A retail promotional program is a campaign designed to promote a product or offer to potential customers in a retail environment. The objective of a retail promotional program is to increase sales and build brand awareness through a variety of strategies, such as offering discounts, free gifts, and other incentives to encourage customers to make a purchase.
Retail promotional programs can take many forms, including in-store displays, advertising campaigns, direct mail, online promotions, and social media marketing. They may be targeted at specific customer segments, such as new customers or loyal customers, and may be timed to coincide with special events or seasonal trends. Successful retail promotional programs are often carefully planned and executed, with clear goals and metrics for measuring their effectiveness. They may also involve collaboration with retail partners, such as wholesalers, distributors, and other stakeholders in the supply chain, to ensure that promotions are aligned with business objectives and customer needs. So lots of effort for a pretty critical commercial outcome with lots of moving part!
For the program to be effective retailers require 3 departments to work collaboratively: merchandise (or category), marketing and operations. This can sometimes be a lot harder than it should be and where the majority of inefficiencies in a promotional program surface from. For example, if the stores; be it due to lack of communication, instructions, marketing material, pricing or product reason; cannot execute the promotional plan, (a set of products, marketing material and ticketing), then there was little point in buying in additional product, negotiating supplier promotional terms, developing the advertising material, buying the media and printing and distributing the marketing support to bring the promotion to life. This is what we would deem as a failed retail fundamental and it is time to get back to the basics.
I am in the market for a modular sofa and have been trawling the internet for days (more like weeks) trying to find something that suits. Here is my journey influenced by a promotional campaign:
- Freedom has started to serve me up a sponsored Google ad on Chrome for the Sorrento modular sofa range that offers 50% off the second item
- I lean in, click through and look around to see if it is something I want to either buy or explore further
- I like what I see, and I head in-store as I need to see this one in person, especially the available fabrics and colours
- Well done Freedom, as when I went into your Newmarket store the Sorrento range was in a prominent foot traffic location, well merchandised, ticketed and supported with the same marketing campaign I had seen online. Job done. 👏 👏 👏
I challenge you as a retailer to do this exact journey with your own current promotional campaigns and see if you are delivering a connected customer journey end to end. Or better still, check out your competitors if you want to feel good about yourself!
Even though this Freedom example was nailed, this is not often the case for the customer. They turn up in-store and a multitude of roadblocks stand in their way of hunting down the offer and/or the product.
In our experience the general issue here of what went wrong is a simple case of lack of communication, planning, and departments working in silo's. This ineffective connected customer journey will mean you have an inefficient (possibly non-existent) promotional process in place.
How effective and efficient is your promotional /GTM process? The 3 key signs you have an ineffective and inefficient promotional or Go to Market (GTM) process in your business:
1. Lack of store compliance
If a store has not executed the promotion correctly you will be confronted with a multitude of reasons.
No stock or not enough stock to do a display – merchandise did not buy enough product at the right time, or additional product wasn't sent to the store, or they weren't given notice to order in the right quantity of product.
No price ticket to support the display/product – merchandise/marketing did not set up a promo ticket or they did not receive a promotional ticket in their promo pack.
Each store interpreted the promotional set up differently – merchandising guide was unclear or too complex…or non-existent!
There were marketing collateral issues – marketing don’t have an accurate view of what each stores requirements are, or marketing was late with artwork and getting the POS collateral printed and distributed (generally due to other internal issues like pricing not being signed off or changes in the offer from merchandise).
No staff to set-up the promotion for the start date - this is often due to a lack of communication, receiving information late and not being able to staff appropriately, or support office not being realistic with just how long it takes to set-up a promotion (and sometimes Operations have cut the labour budget and this week you are on bare bones OR your staffing might be light due to sickness or vacancies).
Each of these can be overcome with a robust GTM process which ensures all the components are planned for, considered and orchestrated in the right order and timing and a good visual merchandising guide.
2. Constant complaints from the stores and Head Office about the promo program
If you find your team members are struggling to get a promotional program out the door successfully and you are hearing noise in this area each cycle then:
There is either no documented promotional or Go to market process
Or if there is, it is possibly out of date and or has "grown" shadow work-arounds as people have left the business or the GTM process simply doesn't work
Your team should be able to pull out a one pager or at least a timeline of the what, when, where and who for the every promotional program. This is a massive gap in the majority of retailers currently:
- as there has been a high turnover of staff
- covid required agile practises and day-to-day processes went out the window
- new systems and channel requirements means there are more things to be considered in the process
In our experience, we haven't found a retail business that doesn't require a RESET.........and some businesses really have to return to BASICS. Go ask for the process documentation from one of your merchandise or marketing team about how your GTM process is going? Better still, ask both teams for it and see what they give you and say. I suggest you will hear a lot of noise, finger-pointing and see crumbled faces.... and some of them will tell you they can't talk to you about it as they are too busy fixing the next promo cycle!
3. Promotional program not hitting the revenue targets
If we put to one side the obvious reasons for not hitting the targets (not enough stock available or it was not priced correctly), we can channel our energies towards our customer, our data set and our targeted offer.
To ensure you are promoting the correct products/services in the correct stores you must not only have a good handle on your data, but be able to surface it, and be able to use it in a way that everyone can understand it.
Retail Data 101:
Each of your stores should have a profile data set - this allows you to have a product and marketing mix that is somewhat unique for this store set.
You should also be able to understand who the customers are in these stores and what they are shopping for. Your promotional program should fit these store and customer sets.
If you have this information, and you have it in a format you can easily use, then you can set each of your stores up with a store layout and promotional set-up based on a journey that is meaningful to their profile and customer set.
In most retailers, a store in Ponsonby vs a store in Invercargill, selling the same products, could have a different promotional priority set for their campaigns.
- Think local or even regional in this case - the difference in climate, the difference in customer.
- The same products might still be on promo but it could be a simple difference that the promotion planogrammed at the front of the store in Invercargill is in a less prominent area in the Ponsonby store, as the product is not a high priority product for this store’s customer.
There is good news and help at hand
If you can relate to any of these signs in your business at the moment then your connected promotional customer journey may be broken, and it will be extremely hard to deliver to not only your budgets and expectations, but also to your suppliers expectations. With promotional cycles a significant investment in money, resources and desired results each cycle, you really cannot afford to not have this retail fundamental nailed. Life will just keep getting get hard…if it isn’t already.
The good news is this inefficient and ineffective way of working can be easily overcome…once it has been identified. This is a speciality of our team and we can quickly identify opportunities to optimise your promotional or GTM process, and help you rebuild your team for success. The implications are life-changing for internal teams and the efficiencies can continue through the digitisation of in-store executional requirements.
For further information check out our Optimisation Toolkit for retailers if you want to:
RetailO2 is a sister company of RX.
At RetailO2 we work alongside your business to review, define, and refine your retail systems and processes related to marketing operations, merchandise, experience, and the customer. We also constantly research digital tech that can assist retailers in doing more with less.
Contact Gina at firstname.lastname@example.org
Gina Brugh is RX's Merchandise, Process and Systems Design Specialist and Co-Founder of RetailO2 (our sister business). Gina is a naturally curious person who often asks the questions "no one else is game to." Gina currently works alongside businesses to review their “go to market” systems related to marketing, operations, merchandise, experience and the customer. With a background and career straddling marketing, merchandise and operations across retail, manufacturing and supplier sectors Gina helps businesses optimise their process and systems design through automation and process streamlining.
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