Discounts and promotions are at an all-time high, often comprising the single-biggest cost within many retailers’ P&Ls. Yet despite these high stakes, and the growing adoption of sophisticated analytics, many retailers continue to take a broad-brush approach to running promotions that results in missed sales and profits.
For Better Retail Promotions, Ask These Questions
Discounts and promotions are at an all-time high, often comprising the single-biggest cost within many retailers’ P&Ls. Yet despite these high stakes, and the growing adoption of sophisticated analytics, many retailers continue to take a broad-brush approach to running promotions that results in missed sales and profits. The good news is that many large retail organizations already have the tools and data they need to craft more effective promotions. What they lack, more often than not, is a logical way to structure their promotional effectiveness analysis. The solution can be found by asking a series of strategic questions, then carefully parsing the data for the answers. When are discounts most likely to stimulate a sufficient sales response? Does the promotion work best in-store or online? What products are most likely to garner more response when promoted? How does response vary across tactics?And, who is most likely to respond (e.g., new versus existing customer groups)?