How to create effective promotions in an uncertain economy
Grocery shoppers are hungry for deals and promotions in an economy marked by still-high inflation and the specter of a recession. According to the 84.51° Real Time Insights December 2022 Survey, 71% of consumers are looking for sales, deals and coupons and 55% have switched to a less expensive brand.
As for CPG marketers, they want to:
Reach consumers as they’re shopping (online and in-store)
Personalize consumer communications
Make agile, insight-driven decisions
Improve return on ad spend and drive sales
At the same time, rising commodity prices and other challenges are affecting CPGs and retailers as well. Simply rolling out discounts is not the answer. Here’s how to maximize trade promotions strategies—benefitting both customers and the business.
Know the category landscape
The first step to creating a promotional plan that delivers value to your customers and retail partners is to understand the category landscape. Are shoppers moving out of your category, buying less often, or switching brands?
Combining shopper insights with retail performance measures will help identify the right pricing and promotional levers to pull. 84.51° Stratum, for instance, is an analytics self-serve solution that is powered by data from nearly 60 million households. It provides users with multi-dimensional views of shoppers along with data explanations and visualizations that make it easy to analyze shopper behavior shifts in your category, among many other analyses.
Understand retailer goals
What are your retail partners trying to accomplish in your category? Aligning the promotion with your retail partner’s business goals helps ensure you’re creating value for them as well (and could incentivize them to provide an optimal shelf space and location). Work together with the category manager to define, analyze and deploy the category strategy and execution tactics. This is especially important for emerging CPG brands that have just begun to form retailer relationships.
Design personalized offers
Give consumers the kinds of promotions that resonate the most with them. For instance, while coupons are an integral part of the shopping experience for many people, personalized coupons are a key differentiator that drive customer loyalty.
Define your desired result—e.g., acquire new customers or reacquire lapsed customers—and personalize the coupons accordingly. To acquire new customers, consider using look-alike models, a marketing methodology used for finding new customers who behave similarly to existing customers.
To reacquire lapsed customers, use what you know about them, such as past browsing or purchase data, to send a relevant coupon that piques their interest.84.51°’s Best Customer Communications (BCC) platform provides CPGs with powerful ways to engage customers with personalized content. BCC includes printed and digital versions of coupon vehicles such as Loyal Customer Mailers, MyMagazine and New At Kroger that are fueled by data science and a mix of different retention/acquisition capabilities.
Amplify the impact
Utilize multiple touchpoints in and outside stores to amplify the impact of your promotion and get your brand on shopping lists. The goal is to create a seamless and authentic consumer experience. But instead of relying on generic marketing campaigns, savvy brands are enhancing their campaigns with cutting-edge analytics and data science.
Powered by 84.51° data science, Kroger Precision Marketing (KPM) helps CPGs identify the most relevant households and touchpoints for their brand. Onsite search (product listing ads that appear in search results on Kroger properties), streaming TV ads through Roku, targeted digital coupons and off-site advertising through Instagram and Pinterest are just some of the many ways KPM helps CPGs reach consumers across multiple touchpoints in high-impact formats.
Measure and optimize results
This last step is critical for getting the most out of your promotional campaign and setting future campaigns up for even greater success. In addition to ensuring that the promotional campaign has been properly executed by the retailer, it’s important to track its performance.
While a promotion is running, media planning now includes layers of metrics that allow CPGs and their agency partners to see how campaigns are translating into sales and adjust media investments in mid-flight as needed.
After the promotion has ended, besides obvious questions such as, did the promotion meet sales targets and drive uplift, look for learnings that can be applied to future trade promotions. 84.51°’s Enterprise Price & Promotion Team, for instance, measured the impact of a Kroger promotion, “Save $10 when you spend $75 or more on your trip.” The team found several interesting insights such as, while the promotion didn’t attract a significant number of new customers, it attracted lapsed customers, which can inform future promotions.
Nothing helps move products like promotions and coupons. A well-executed promotional campaign is also a great way to build customer relationships and differentiate your brand from competitors. As consumer demand for discounts increase, now is the time for CPGs to utilize cutting-edge technology and customer insights to optimize their promotion strategies and maximize results.
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