There is never a time when it’s not worth placing a promotion in-store. All shoppers love them. However, no matter if you’re the retailer hosting them or the supplier offering the deal, you must plan them. And meticulously so. Because if you don’t approach your promotional planning with care and thought, you can’t expect to see the results you want.
What is promotional planning [and why is it so critical to get right]?
Before we get to the actions that you can take to improve your planning efforts around promotions, there is the little matter of understanding what promotional planning is and why it’s so critical to your success.
A promotional plan is “considered a vital planning tool by most business managers that helps contribute toward the successful launch of a new product or service or its expansion into a new market”. In the context of retail, and this piece, it’s used to help retailers facilitate the process of selling promotional space to manufacturers and suppliers in a way that is mutually beneficial.
That said, it’s not only crucial for retailers to get right. It’s just as critical for you if you’re a supplier. That’s because of the following:
Proper promotional planning ensures that you place the right stock on promotion and that you supply the retailer with enough product so that they don’t run out while the special is on. Besides that, with proper planning, you have every opportunity to create enough hype and excitement around the product to keep it top of mind after the deal ends so that customers continue buying it once it’s returned to its regular price.
That means additional sales for you, the supplier and a happy retailer who is interested in stocking more of your product. There is also the point that generating excitement for one product may create demand for another within the same category.
Meanwhile, failing to plan your promotions properly is detrimental to your business. How can it not be? Not only do you miss out on potential sales but you could very likely damage any relationship that you’ve built with the retailer.
For example, you could offer a retailer a great deal that you know will sell well, and yet you can’t supply enough stock during the promotion, so their customer stops buying from them. If that happens, the retailer has every right to reconsider hosting any other promotion that you offer them.
How to improve your promotional planning efforts
From a retailer’s perspective, when planning promotions, one of the first things they would need to do is organise their space. From there, it’s about deciding which products are going on promotion as well as how much stock they required to meet customer demand. Pricing and marketing play a prominent role too.
That said, as a supplier, you shouldn’t let them do this all on their own. It’s just as important that you help the retailer with all of the above, and especially so if you’re recently purchased promotional space in their store.
Of course, no matter what type of help you offer, you do need to plan. Here’s how:
1. Decide on your promotional objectives
The first action you can take to improve your efforts is the most obvious. That’s because it applies to you regardless of the industry in which you work. In short, you need to decide on the objectives. Posed as a question; what do you want to achieve by putting the product on promotion?
Of course, to get to that point, you need to understand your target market. Who are they and what are their buying habits. Are they likely to buy the product you want to place on special? If not, it’s time to reconsider your promotion. Also, do they have the budget or will to want to buy the product at the promotional price?
If you’ve supplied the product to a retailer before considering putting it on promotion, it’s also worth looking at the number of sales over a given period. Does the sales volume necessitate a promotion? If you’re launching a new product, and thus don’t have the sales figures to know, that doesn’t mean you shouldn’t at least attempt to look at similar products in the same category (and market) and see how they’ve sold.
Using the market data that you’ve collected, you can forecast your sales. It’s worth noting that while forecasting isn’t an exact science, you can at least set up healthy expectations.
From there, it’s about looking at the product. What makes it different from your competitor and how does it benefit the customer? In the case of ‘customer’, for you, you could include both the retailer and their shoppers. Also, how does the price benefit your pocket and will it cover your costs?
Upon understanding your target market and how your product can fit their needs, it’s time to set your objectives. For example, if you want to sell X amount of product over the period that it’s on sale, how are you going to do that?
With your objectives in mind, you can go about setting up how you’re going to help the retailer to promote your product to shoppers to meet your goals. That includes both your out-of-store messaging (pamphlets, newspaper and TV ads) and in-store messaging (banners and signage).
2. Align yourself with the retailer
For a promotion to be genuinely effective in-store, there needs to be a complete buy-in from all relevant parties. That includes approval from the retailer as well as yourself. One way of ensuring that is to align yourself with the retailer’s needs.
But how do you achieve alignment? More importantly, how do you persuade the retailer to choose your products to promote over a competitor?
Simple: you look at how promoting your products benefits the retailer and how it can assist them to meet their goals. Their goals usually consist of how much money your promotion can make them. A supplementary goal could be to strengthen their reputation as the go-to retailer for a product. Another aim would be to foster the reputation of being a retailer that has the best prices.
Regardless of their ambitions, retail data can help you. By using retailer-specific data and overlaying it with any market data that you’ve collected, you can show the retailer exactly why it makes sense to back your product.
Of course, negotiations do play a significant role here. For example, to get their full support, you might have to take on some or most of the costs of hosting a promotion in-store. That could include paying for the product launch as well as any associated advertising, both in-store and out. You could also agree to merchandise the category for the retailer too. But that shouldn’t matter if as a result of doing that, you both benefit financially.
Since the retailer owns the promotional space, you do need their backing should you want to change anything in-store. Again, if you can give the retailer enough reason to do this, you shouldn’t face a problem. Then they’d be happy to provide you with the space knowing that what you do with it will ultimately benefit their business.
3. Implement your promotion in-store
Once you decided on your objectives and you've aligned yourself with the retailer, it’s time to implement your promotion in-store.
Again, appropriate steps should take when putting your plan into action.
For one, when implementing it, you need to ensure that you have sufficient support at a store level. While you should already have the go-ahead from the retailer, this support can come in various forms.
For example, while you would usually send in your own merchandisers to merchandise the shelf and set up the promotion, you could request help from the retailer. Of course, this is rarely done and depends on the terms that you’ve agreed during previous negotiations. But it can happen.
Alongside in-store support, before beginning with any placement, you must ensure that your stock levels are sufficient and the correct pricing is in place. In the case of your pricing, we’re referring specifically to your labels and shelf talkers. A bonus of including shelf talkers is that it can add value to a shopper’s purchase journey and improve their experience in-store.
If you require proof of implementation from your merchandisers, you could request that they take photos. Your merchandisers can then upload them to whichever internal system you have at your disposal. By communicating what is in-store, you can rest easy knowing that everything is in place.
Also, by proving implementation, you’ll have a record. You could use that record and the data that you’ve collected during the special to push for any future promotions on that product if the results were positive. Or, use it as proof to show another retailer that it's worth their time to promote your products in-store.
4. Measure your outcomes and respond appropriately
As much as you can choose your objectives, get buy-in from the retailer, and implement your promotion, you won’t know for sure if what you’ve done is correct until you measure your outcomes.
Fortunately, there are a few ways to measure whether your promotion was a success or not. For one, you can look at the sales and unit movement. Since your main objective is to move as many products as possible to generate good profit, it’s fairly easy to determine success.
If your sales and unit movement is done, or not where you expect it to be, it’s worth relooking how your merchandisers implemented the promotion. Or, maybe your goals were too high and so you should adjust them.
That said, there are various factors that influence your ability to measure your outcomes.
A few of these factors include the promotional period; whether the plan was executed as initially intended; and if the products were restocked correctly. On the period, if your sales and unit movement is down, it’s worth considering the time that you ran the promotion to look for any clues as to why you failed.
For example, if your promotion was for seasonal products and you decided to run the special outside of season, that could be a clear indication as to why it failed. That’s an obvious example. In some cases, a promotion can fail for reasons that aren’t as clearcut.
Looking to get more shelf space for your products in-store? Or, need advice on how to negotiate with and persuade a retailer to take on your promotions? Book a free consultation with one of our Account Advisors here or click below.