Talk to an Expert

    Refocus on promotional mix over price to win back customer loyalty

    By Ed Betts, General Manager – Retail Lead Europe at Retail Express

     Grocery price inflation has hit a record high, resulting in the prediction that households will face an extra £788 on their annual shopping bill[1]. Worried customers have already made adjustments to shopping patterns and cut back spending. For retail businesses, the financial squeeze caused by product and supply chain pressures means that cutting prices is challenging, yet they are under significant pressure to attract and retain customers.

    Many retailers will be watching the activities of the deep discounters with keen interest, particularly as January figures showed one achieving sales 26.9% higher year on year and another recording a 24.1% jump putting its market share at 7.1% according to Kantar data. Amid record inflation, supermarkets continue to search for alternative ways to offer customers value with a pronounced shift in focus to everyday low pricing (EDLP), comprising price matching and loyalty scheme incentives to help shoppers save.

    But it is notable that the proportion of spending on promotions has recently fallen to its lowest level since 2008. With product margins so tight and little wiggle room on price discounts, retailers need to be creative and reconsider a broader, more strategic promotional mix to maximise visibility and maintain margins across the category. For those not looking to position themselves on price discounts alone, creating a buzz beyond price will be key. But which products, where and when?

    Promotion beyond price

    Better product placement within a store often means the difference between an item remaining on the shelf or making it into the basket. The use of premium sales space to promote an item can attract supplier funding for space instore that guarantees extra visibility for key lines and exposure for their brand. But this will call for activity that goes the extra mile and avoids the expected norms.

    Retailers should consider using imaginative stand-out displays and approaches that look to evoke emotions or memories tied to a product. Here we are looking to break repeat purchase patterns and encourage brand switching through high engagement tactics that will excite and entertain. Critically, avoiding low engagement tactics will be key. A well-promoted product could well mark the tipping point in seeing customers turn back towards a familiar item from a trusted brand, instead of seeking an alternative elsewhere based solely on price.

    Once a promotion has been running for a pre-determined period of time, retail teams will need to ascertain its level of success. There are three elements to consider here: firstly, looking at data to see how the product performed historically; secondly, considering what’s currently happening using real-time sales tracking; and finally, determining the action to be taken next and how this will impact on performance. Proper planning in relation to promotions is essential and requires a critical workflow path. System generated promotional and marketing plans offer full visibility, helping to identify which products are being promoted, the marketing activity around them, and who is responsible to ensure that nothing is missed.

    A dedicated AI solution driven by data

    Retailers now need to carefully consider the tools at their disposal. Intelligent merchandising software, driven by artificial intelligence (AI), can reveal optimum product placement to identify those which will give the best return on investment. AI-driven forecasting can determine how a product should perform based on previous marketing and promotional data, rather than guesswork.

    Intelligent merchandising software can also reveal how well a product performed at different price points and identify the marketing activity that was used to support it. A forecast can be generated accordingly to show the ideal promotional mix for creating the right buzz. Additionally, virtually calculating profit and loss (P&L) becomes easier due to the ability to consider past, present and future activity. Through data-driven insight around each product, retailers can be confident in creating a winning promotional mix across their key lines that puts them in good stead for the future.

    To learn more visit:


    More from Uncategorised

    • Analytical service for Retailer’s

      Merchandising | Press Release

      Analytical service for Retailer’s

      Retail Express has recognised the opportunity to provide a more granular Price Optimisation/Category optimisation and analytics service to Retail Category teams, to help/assist/investigate difficult categories and to provide help where it is most needed on a short-term or continuous basis – without the need to commit the whole business or contract for multiple periods. Areas where we can help: Improvement of under-performing categories that would benefit from …

      Learn more
    • Retail Express recognized in Retail CIO Radar 2022

      Awards | Press Release

      Retail Express recognized in Retail CIO Radar 2022

      Retail Express has been recognized by Retail Today magazine as a leader in the Price Optimization & Management and Merchandising categories in Retail CIO Radar 2022, a first-of-its kind annual list of most innovative & transformative retail technology solution providers. In making this selection, Retail Today’s editorial team has analyzed universe of Retail solutions in 16 categories—scanning nearly 7000 applicants and nominees. Based on the solutions innovative …

      Learn more
    • Retail Express at NG Retail Summit 2018

      News | Press Release

      Retail Express at NG Retail Summit 2018

      Retail Express attended Next Generation Retail Summit, Royal Turnberry Hotel, 14 – 16 May 2018 Scotland UK – May 14th – 16th 2018 – Retail Express The summit was an opportunity to sit down 1 on 1 over 3 days with key retailer professionals from across Europe and discuss the latest advances in machine learning and how we can use this technology to improve their business and …

      Learn more
    • What is Intelligent Merchandising?

      Analytics | Blog

      What is Intelligent Merchandising?

      Automatically taking account of past/present/future merchandising plans for each new merchandising decision be that a price, promotion or advert. Tracking the impact and cross effects of those decisions in real time. Enabling you to make more informed decisions about your category. Visibility Accurately see the impact of all current and planned merchandising activities on all new activities such as prices, promotions, media channel, ads or store location. …

      Learn more

    Download Whitepaper