The December edition of the Willard Bishop Competitive Edge newsletter – Enhancing Promotional Effectiveness- shares some interesting findings about the uses and abuses of selling product on promotion. While some retailers feel forced into the practice because of changing consumer buying habits, it does not seem to be working. According to Competitive Edge, in many cases the glut of promotional activity is only serving to help retailers draw even, not break ahead in terms of sales or profits.
An eye catching statistic from the Bishop report is the finding that in six markets, 38% of supermarket sales are made on promotion and yet only 37% of those sales where truly incremental. That means that the remaining 64% were inefficient and only seem to subsidize the consumer in a sale that would have been made anyway. The opportunity lies in the ability to undertake strategies and tactics that result in incremental sales.
Competitive Edge identifies some significant barriers that stand in the way of promotional effectiveness. They are: Tracking and Accountability, History-Based Planning, Reactive Planning, Catching Offers and Communication. The story goes into some detail and explanation on each of these, as well as, identifies best-in-class approaches to maximize promotions.
So what can NARMS members do to help retailers and manufacturers plan and execute truly effective promotions? Almost all promotions have elements that require at-retail shelf activities. From planning, preparation and follow-up reporting, the services of at-retail merchandising and marketing companies can, almost point-for-point, address the barriers indentified in this article.
As service providers, it is always helpful to know the challenges of our client base so we can effectively communicate how we can help them reach their goals. Take a few minutes today and download the December issue of Competitive Edge by clicking here. The time is right to reinforce the message that, in addition to being dependable operational resources, NARMS members are a powerful force in truly effective promotional strategy.
David and Laura Butler of WorkLife Performance Consulting review their session from the 2009 NARMS Conference about how to motivate the remote employee.