Learn from the past to improve the future for your trade promotions

27 November 2013

David Williams

David Williams

Head of Consumer Products

In this bright future, you can’t forget your past.” – Bob Marley

Bob Marley isn’t normally associated with the world of trade promotions but the line from his song is prophetic when it comes to planning promotions. Retailers and consumer products companies have binocular vision focused on future plans to grow their business. More frequent or deeper cut promotions are often the result of this blinkered focus as they are the easiest way to drive the top line and ‘win’ against the competition.

However, from a sustainable strategy perspective, many companies are now realising that they have helped create a vicious cycle of promotional dependency and the bottom line is suffering as a result.

So what is the answer?

Look to the past... a deeper understanding of what is driving promotional performance will help to fine tune future promotional execution, mechanics and even strategy. Was the reason that the 25% off promotion that you ran because it was too shallow a discount as your buyer is suggesting? Or was it something else?

  • Did you get the displays that you paid for?
  • Were the SKUs on display the most profitable/ the best sellers?
  • Was your competition promoting at the same time?
  • Was it the wrong time of year?
  • Was your promotion not aligned to your big media campaign?

There are many factors that influence promotional performance and you should understand and master these before deciding that discount level or promotional frequency are the answer to your problems.

The other factor you must consider in post promotional analysis is which version of the past you should analyse. The answer to this is clear – if you have Point of Sale data (EPOS) you should use it. This data shows what the shoppers actually bought on promotion. Using despatched or invoiced volumes will skew your analysis as it includes products that may still be in the warehouse or left on the shelves at the end of the promotion.

Post promotional analysis will open your eyes to the (sometimes shocking!) reality of your investments with your customers. Once your eyes are open to the past, you can then focus more clearly on the future.

Make post promotional event analysis a habit, learn from the past and you will see the results in your trade promotions.

“None but ourselves can free our minds.”

 

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