RETAIL THERAPY How to: plan your promotions
Retail consultant Clare Rayner gives a step-by-step guide to creating the perfect events and promotions calendar to get you set for 2012!
In advance of what is predicted to be another sluggish year for the economy, creating a calendar of well timed and well thought out events and promotions is one of the most useful things you can do. Clare Rayner outlines the key steps and objectives to provide some useful food for thought!
STEP ONE: ADD IN KEY DATES Add in all of the events that could impact consumer buying patterns: bank holidays, academic holidays, national sporting events, religious holidays etc. Next overlay any local events that may influence at a store specific level. Finally add all the range launch dates and “sale” dates (from 24-hour spectaculars to end of season clearance). Already your year planner should be looking quite busy!
STEP TWO: ASSESS DEPARTMENTAL OPPORTUNITIES Now determine which departments and/or ranges could benefit from promotional activities associated with the given events, such as childrenswear for ‘back to school’ or garden furniture in early spring. It’s important to avoid running a promotion that would essentially just be giving away margin. When the increased volume due to sales uplift from the promotion covers the overall cost of the margin “given away” in discounting as well as any other costs incurred (promotional flyers etc) then the net effect of the promotion is beneficial. If there was likely to be a natural uplift in demand (as might be the case with garden furniture in the spring) then the promotion may only achieve a very slight uplift in sales and the margin from the incremental sales may be insufficient to cover the value of the margin given away on items
that would have sold regardless. It’s always worth inviting suppliers to contribute to the promotional plan. Often they will have budget to support key events or to stimulate sales at particular times.
STEP THREE: THE LEVEL OF INVESTMENT Generally speaking, the more time invested in planning (for anything) means a better and more successful outcome. However, it is important to ensure activities have a good ROI. Therefore, like with any effective business activity, there should be a clear ‘project plan’ with timelines, assigned resources, costs and benefits. Your customers have come to expect you to offer promotions and events. Surveying customers to understand what type of promotions and events they like most would be valuable insight as you may find some of what you do is just creating noise and not really engaging your customers. Your promotional strategy should be a key part of your overall positioning and customer engagement approach, so it is worth spending time up-front to determine the ideal promotional mechanics for your customer (and target customers) as well as setting some clear success criteria for promotions e.g. ‘increase basket size’ or ‘increase new customer acquisition’.
STEP FOUR: GOING DIGITAL Investment must depend on your ideal customer and what media they are currently being influenced by. There is, beyond any doubt, a huge shift towards the consumer being ‘in control’. Google reported that over 60 per cent of consumers researched online prior to completing their transactions in store. In October 2011 the BRC-Google Online monitor indicated retail-related search accounted for over 10 per cent of all search traffic, and mobile was driving that with a
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168 per cent increase in mobile search in the prior quarter alone! This means that to engage the customer the internet is undoubtedly becoming of increasing importance – and whatever you deploy on the internet must be visible on mobile browsers too. However, whilst the ‘attraction’ element of customer engagement is evidently shifting to online media the conversion element is still predominantly completed in- store. Focus on increasing the investment in online media for attracting attention to the promotions and events and then ensure that the in-store execution lives up to the promises made online.
THREE AREAS TO FOCUS ON IN 2012: 1. Loyalty programmes: customers are generally happy to engage with loyalty programmes if you can offer something worthwhile back in return. If you don’t have an effective loyalty programme, then one which links into CRM and keeps track of your customers through all channels is a must as consumers demand more from retailers. 2. Personalisation of messaging: consumers value personalisation, where retailers get it right, because it saves them time and enhances the relevance of their shopping experience. When customers have ‘allowed’ you to
take their data into your loyalty system they do then expect you to use that to advantage them in some way. In our fast-pace, online, socially-connected world if you can get personalisation of messaging right you will significantly increase your response rate to your marketing materials. 3. Online marketing: this is a bit of a broad area, however, the aforementioned increase of mobile use is giving rise to two areas where a department store could market more effectively. o Social media – when it comes to using social media my advice is to be where your customers are. If your customer insights tell you they are using Facebook and Twitter then you need to, at the very least, have monitoring in place to address feedback about your brand online. o Local search – consumers are searching for answers to their needs and wants online. Due to GPS technology most mobile search results include a location element in the first three results. With over 60 per cent of those who search wanting to complete their purchases in-store, if you can ensure your store appears in location specific search for the key things consumers are looking for in your area then you
will secure new consumers. n
For more information visit
www.retailchampion.co.uk
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