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A strong strategic focus built around a sound “platform” that includes the right categories, brand and products results in successful retail promotion campaigns, according to L.E.K. Consulting.
In a recently published white paper, “Retailers: Making Promotions Pay Their Way,” the Boston-based strategic consulting firm revealed how retailers can employ promotions offensively to achieve more than just awareness on the part of consumers and a temporary increase in sales.
According to L.E.K., the best promos incorporate “right-to-left” thinking -- pinpointing a specific goal for the campaign and working backwards to design all of its key elements. Rather than trying to accomplish too broad a set of objectives, the most successful campaigns start with the desired result(s) and establish clear operating principles to ensure that they are achievable.
Additionally, choosing the right platform -- whether it’s a product category, brand or a specific SKU -- is key, stressed L.E.K., adding that retailers must have a thorough understanding of the role an item plays in their stores.
The firm recommended that retailers answer the following questions prior to selecting the right platform:
--How does the item relate to the category?
--What does this promotional item say about our store?
--What kind of store does this item best serve?
--Product or price -- which are you promoting? It’s important not to over-promote when you have already created a reason to buy.
--Can promoting one item help sell other, higher-margin items?
Once the right platform is in place, the firm advised retailers to ask themselves the following questions when designing actual campaign:
--What is the overall strategy the promotion is supporting and what specific goals should it achieve?
--What is the best offer (e.g., price discount, “two for one,” etc.) for the promotion?
--Where should we run the promotion -- in all stores, in some stores, in some departments in some stores?
--When, and how often, should we promote?
--What is the best way to communicate the promotion? What is the right combination of media, shelf location, external signage, in-store displays, etc.?
--How can we ensure the promotion generates a return? Is the minimum expected lift in sales realistic? Do we need vendor support? Are there longer-term metrics and if so, what are they?
--How will we monitor performance so that we can refine and improve future promotions?
For more information, visit www.lek.com.