Got profitable promos?
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
Profitable promotional lift has gone to hell in a handbasket. Little by little over the years, incremental dollars are fading, regardless of levels of spending.
So retailers and manufacturers alike are experimenting with new ideas instead of merely bitching about how their trading partners are thieves and how promotion is an inefficient, money-grabbing boondoggle that randomly and rarely builds sales or consumer loyalty.
Okay, so 96.5 percent of that is true. And bitching is enormous fun. But it’s right up there with watching YouTube videos when it comes to getting anything constructive done. Here are three ideas to ponder:
Promote smaller, innovative brands more often or more deeply. It’s easy to lock in with major manufacturers on the same programs year after year, but you need to shake things up if it’s clear the category is losing ground or has gotten stale. Often, there’s no real excitement (think tired line extensions) in these programs anyway and you’re just training shoppers to buy big brands only on deal. Unique and innovative products (more often coming from smaller brands) add fresh excitement and help differentiate your offering. And a deep promotion on one of these items — especially if it has a relatively high shelf price — builds trial among shoppers who may not want to risk spending more than usual. Often, these trial buyers become long-term users.
Take the risk and give these innovative items the facings they deserve, too. If your buying/merchandising is based on last quarter’s scan data, you’re driving a car by looking in the rearview mirror. Spend more time looking at menus of hot restaurants in your area to stay on top of consumer trends. Then, take action on the shelf, whether it’s adopting new items or giving more space to innovative items that are on trend.
Bring new ideas to your trading partners. They’re probably as frustrated as you are, and more willing to negotiate than before.
What tips do you have for creating effective and profitable grocery promotions? Which suggestions above make the most sense?