If you follow me on Instagram, you may have seen my InstaStory confession over the weekend about my love for the supermarket. Every week, I look forward to my Saturday morning shop just so I can peruse the shelves and see what has been launched launched and what promotions are running. I began my career in FMCG and spent more hours than I can count in supermarkets. Apparently, you can take the girl out of the supermarket but you can’t take the supermarket out of the girl.
One of my favourite things to do is to analyze why different brands have chosen to run different promotions. Each type of sales promotion meets specific objectives, and if objectives are not properly matched with a suitable promotion then the whole activity will likely be a futile effort.
I thought I’d share the different objectives to help you better plan your promotional strategy and get the desired results. Below are some of the most popular type of supermarket discounts, but the concepts can apply across industries.
Single piece discount
Objective: single piece price offs, as they’re known in FMCG, are the most common type of promotion on the shelves. They’re mainly used to entice trial by new consumers, bring forward purchases by regular consumers (i.e. gotta hit my target this month!), and regain lapsed consumers.
Pros: Easy to implement, low risk for shoppers, short term sales boost, can gain new customers.
Cons: Using this tool too often will cause shoppers to expect discounts as a given. They may begin to put off purchase until you go on sale again.
Objective: Volume! Dual and triple packs of an identical product are used intermittently to boost revenue and sell in bulk. They are targeted at loyal consumers who know and use your products regularly. This type of promotion does not drive trial by new consumers, as there is too much risk involved. Dual/triple packs are also regularly used during seasons in which product use soars. For example, in Ramadan many food brands release this type of promotion as food preparation needs increase. They’re also used when products are near expiry, so as a shopper you should always check the use by dates of these promotional packs.
Pros: A sales spike.
Cons: While consumers generally use stock faster when they have a lot of it, bulk discounting does load up your regular users so that might mean that your upcoming months show the opposite trend of your short term sales spike.
Things to avoid: Do not combine two full size products that aren’t identical. It is rare that a consumer would want to stock up on a product they haven’t tried. For example, don’t make a dual pack that includes 2 different juice flavours. If I want to stock up, I’ll stock up on the juice that I like and I’m used to.
Combo pack/cross promotion
Objective: A relative of the dual pack, cross promoting is a great way of combining complementary products or services. If you run a salon, you could run a promotion that combines a mani/pedi with a foot paraffin treatment for a discounted price. This would drive trial on a lesser known service like paraffin, which could lead to future bookings at full price.
Pros: Highlight less known products or services and increase shopper “basket value”.
Cons: This does not drive sales massively unless the discount is significant or the combination is interesting.
Things to avoid: Irrelevant combinations.
Free sample piece
Objective: A shopper favourite – who doesn’t love a freebie? Small sized samples are often seen combined with fast moving products to highlight new product launches to loyal users or encourage trial of different products within the range.
Pros: Bring a lesser known product to light and reward existent users.
Cons: If the sample product is similar to the the full sized product and could be a replacement, you may actually cannibalize future sales rather than increase revenue overall. For example, if you have launched a new type of coffee bean and you add a sample bag to your fastest moving SKU, you run the risk of consumers merely switching to that new flavour rather than buying both in the future.
Gifts with purchase
Objective: When I was a brand manager on the NIVEA Face Care range, we often opted to add gifts to products as a way to encourage purchase without discounting the price. We would add relevant things like a free pocket mirror, cotton pad holder, makeup bag, etc. to products as a way to push them and also reward our loyal customers. This type of promotion protects a brand’s image, as it is classier than a discount and impacts the perceived value positively rather than negatively, as price discounts can.
Pros: Protects the brand image while rewarding consumers.
Cons: Unless the gift is valuable or interesting, this type of promotion does not usually result in a massive sales boost.
As you can see, different promotions have different uses. Plan and use them wisely to achieve the results you’re looking for! What promotions usually catch your eye and prompt you to purchase?