Recent years have seen major evolutions in the retail sector. It is no longer enough to simply sell products. Today’s retail sector demands an in-depth knowledge of consumer profiles, their needs and shopping habits and the use of this knowledge to create the best possible shopping experience.
Retail Execution describes the activities performed by sales professionals at point of sale aimed at increasing conversions through the optimisation of strategic decisions. In short, it is a series of activities, focusing on the final phase of a product’s journey, which seek to capture the consumer’s attention. The development of smart technologies has streamlined these processes, favouring the incorporation of innovative methods which enable many more specific consumer insights to be obtained.
A recent study by the consultancy firm Ernst & Young Global Limited found thatthree out of four consumer goods companies experienced difficulties in increasing revenue and profitability.
Pressure to increase profit margins leads the vast majority of businesses to apply classic “discounts” aimed at incentivising purchases, rather than using pricing strategies and promotions. While this decision represents a cost saving for companies, it does nothing to enhance long-term growth.
Businesses are clear: the use of new methodologies is paramount. And yet the majority hesitate to take this path.
With the relevant data analysis and proper consumer insight, we can tailor management of prices and promotions to boost profitable growth and achieve a balance between investment and return.
In terms of the management of products and promotions, what can be done at point of sale?
1. Launch 4-5 week promotions to attain optimum ROI. However, promotion length can vary according to analysis of parameters such as seasonality, competition, participation and historic performance. It is vitally important to separate promotions of products in the same category so the spotlight is focused on a specific product.
2. Verify promotional compliance: for example the organisation of draws, competitions, free samples and gifts. Many actions are aimed at promoting products to increase sales, but control of the compliance of these promotions is essential. The dynamics of each promotion must be reliably tracked and adherence to planned timings ensured,
3. Control of product range: for a promotion to be successful, there must be sufficient stock at point of sale to keep the promotion active for the planned time period.
4. Visibility at point of sale: a significant proportion of a promotion’s cost is related to communication and marketing materials at point of sale. The product must be clearly visible to consumers and there must be effective offline and online communication about the promotion, which meets the guidelines set out by the point of sale. The periodic release of information and news reinforces customer awareness of our products.
Finally, it is essential to highlight the importance of a promotional strategy that is tailored to the type of audience we are targeting. Data analysis prior to the creation of a promotion will be fundamental in creating a dynamic that meets the real needs of consumers and ensures certainty about the end result. On completion of the promotional activity, analysis of results to evaluate its impact is another essential step. Have we attained our objectives?
 EY Beyond the discounts: pricing strategies and promotions. – 2019