With the summer in full swing, many retailers have relaxed protective measures which have increased foot traffic and in-store shopping. While the retail environment is always ready for discovery, now more than ever, the summer’s battle for the shelf is as competitive as we’ve seen in a long time.
No matter how highly you might think of the other brands on your shelf, the fight for market share is fought tooth and nail. Shoppers will either reach for your products or your competitors', and your job depends on making sure your brand ultimately wins out. However, some important questions remain:
- Is your brand prepared for this shelf battle?
- How will your brand track the effectiveness of your promotional efforts?
- How can your brand improve its trade promotion strategy and boost its bottom line?
While every promotion and brand is different, highly successful campaigns have a few things in common. Whether you’re executing a temporary price reduction, or coordinating coupons with endcaps, it’s important your brand pushes these three factors to the limit in order to achieve trade promotion success:
The Keys to Trade Promotion Success
Interrupt the Shopper Experience
Promotions inherently flip shoppers who had no prior intention to buy. Win their attention with something that surprises: an atypical display stand or alluring product premium.
Operate under the assumption that buyers want you, they just don’t know it yet. By inserting your name into buyers’ conscience, you establish yourself as a viable purchase in their shopping canon -- the goal of all trade promotions. This works especially well with impulse grabs and other register items.
Win Retailer Love
All merchandisers should understand their market share: their real estate on shelves and on floors. Stripping market share from the competition is key to dominating a location. Retailers will trust your strategies so long as they’re backed with well-recorded data. A strong retailer relationship does more than grant strategic flexibility. Friendly retailers often send employees to keep your displays looking good. Even positive relationships with individual salespeople yield long-term benefits.
Create unofficial brand ambassadors on the floor by winning the support of staff. Employees push brands they genuinely like. Make sure you are on that list.
Change the Product Narrative
Goods sell on the story. Every pitch is a well-crafted narrative on product use. Cheerios markets themselves as heart-healthy, claiming they lower consumers’ cholesterol. This distinguishes them from other similar cereals. Narratives create markets. Promotions must tell a story.
Flash posters of your product being used in a new light. Package in gifted premiums that encourage certain environments. Coors just finished a campaign packaging their 36 packs in a travel cooler, begging to be used in outdoor settings. Change your narrative to change your market.
2 Popular Metrics, and 1 You’re Probably Missing
Accurately tracking trade promotion success is notoriously difficult. Every merchandising team has its own preferred KPIs (key performance indicators), but there’s one metric most teams forget.
The two most popular metrics are incremental revenue and marginal return on investment. Incremental revenue tracks how sales performed when compared with an expected baseline. Marginal return is a standard ROI calculation that uses incremental revenue to calculate the growth rate of a promotion. This is especially helpful at determining promotional value-added with every further dollar invested.
Execution Tracking: The Secret Metric for Accurate Analysis
Numbers alone cannot guide promotional strategy. An ROI calculation with accurate sales data will always produce a genuine ROI, but context is everything. Get this, only 40% of displays are executed by retailers according to the agreed promotional strategy. Maybe your floor display is hiding in the back of the store. Maybe your posters are obstructed. In all likelihood, something isn’t right. Noncompliance with promotional strategy is a costly mistake. Worse, it skews POS data. Do poor returns indicate a bad strategy or a failure of retailers to properly execute? The answer is found through execution tracking.
Execution tracking tasks field teams with recording observational data on every aspect of the promotional space. The “hows” of execution tracking often vary from team to team, but good execution tracking answers targeted questions on promotional health. Just as trade promotions need clear goals to succeed, arm field teams with focused inquiries to contextualize your POS numbers.
For more guidance, explore our ebook below to learn about the four types of trades promotions, and how you can leverage data for smarter execution in the field.
