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Promotions, the powerful tool for creating an impact that too often underdelivers

June 08th 2018

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Majority of retailers run thousands of promotions a year and promotional planning takes the lion’s share of retailer’s resources compared to other core activities. Yet, only a small percentage of retailers have a good insight into which are most effective promotions and why. While a retailer might have the latest tools and clear metrics in use for other activities, campaign and promotion planning might still be carried out using various excel sheets, sticky notes and a white board.

When it comes to effectively running promotions, retailers struggle with two major challenges. One is related to effective time management of category managers. Developing the existing product categories is a vital part of staying up to date with consumers’ preferences but category managers are also responsible for planning attractive promotions and campaigns. Devoting time equally to both activities is not an easy task and in fact, according to Nielsen’s study, 70% of retailer’s time is spent planning promotions.

According to Nielsen's study, 70% of retailer’s time is spent planning promotions.

The other major challenge is connected to the effectiveness and profitability of campaigns. Although lot of resources are dedicated to promotion planning, the Boston Consulting Group’s research indicates that 20-50 % of promotions generate no noticeable lift in sales or even have a negative impact. When taking a closer look at trade promotion numbers globally, we find out that 59% of promotions don’t break even.

When taking a closer look at trade promotion numbers globally, we find out that 59% of promotions don’t break even.

We know that going forward, the role of consumers will only get stronger and also the increasing number of online retailers will leave it’s mark to the competitive landscape. Therefore it is important for retailers to take a closer look at their promotion planning processes and make the needed assessments. With the right solutions in use, it’s possible to simplify the planning processes, make smarter decisions and manage the promotions more transparently and effectively. When promotional activities are carried out effectively it gives more time for category managers to focus on developing the product categories.

With Analyse² Campaign Planning tools you are equipped to build and manage the big picture effectively. You have clear and detailed visibility to your marketing calendar, while the volume estimates help you to make the right purchase decisions. The tools for promotion planning and activity monitoring are all in the same place with the relevant KPIs, allowing you to plan and run campaigns that have the desired impact.

Find out more about our Campaign planning solution.