Succeeding with Retail Promotions: A Mini-Guide for Brands

Setting up promotions is an essential technique for brands that want to boost their sales in supermarkets and hypermarkets. Inflation and the decline in consumer purchasing power increase its impact even more...

The promotion war is on!

But beware, successful promotions require careful planning of your strategy beforehand. Sidely has therefore prepared this mini-guide for you, which covers the fundamentals to master before you get started.

The promotional advertising plan

Before starting your promotional operations in supermarkets, it is important to define your promotional action plan.

But first, what is a promotional advertising plan?

In short, this marketing tool allows you to summarize your marketing plan over a year, and integrate all the advertising and promotional actions you will implement.

Promotions will then be established based on various elements:

• The objective of the campaign: increased sales, customer loyalty, etc.;

• Target customer typology: to best adapt your promotion, it is necessary to fully understand your target audience and their expectations;

• Selected product: you must determine which product to highlight in this promotional campaign, and why;

• Periodicity of actions: you must establish a schedule for your campaigns (start and end date) and decide when to implement them (for example: product launch date, holiday season, back-to-school, etc.);

• Budget: It is important to determine the amounts you can allocate to your promotional campaign, in order to promote return on investment;

• Means of communication: the channels and means to deploy are as numerous as they are varied: sales promotion, TV advertising, sponsoring, press, radio, mailing, or even social networks, etc.

Furthermore, it is imperative to monitor and measure the results, to ensure the effectiveness of your campaign. Indeed, you will surely need to adjust your strategy, based on feedback and market developments.

The different types of promotions in supermarkets

As a reminder, your goal, when you set up a promotion, is to increase sales volume. To do this, you will therefore reduce prices, in exchange for an increase in the volume of product present at the point of sale. This negotiation can be conducted at two times, creating two types of promotions: negotiated and pirate.

1. Negotiated promotions: they are called so because they are negotiated directly at headquarters or regional level.

2. Pirate promotions: they are usually the result of a good relationship between the brand and a point of sale, or off-catalog sales actions. Sales representatives then sell the said promotion directly to the stores.

The different promotional mechanics

Sampling / Free Trial

Let's start with a small warning: since article 16 of law n° 2018-938 of October 30, 2018, the term "Free" in food promotion is prohibited in France. Brands have since been accustomed to preferring the term "offered".

That being said, note that there are two types of sampling or testing of this type:

1. Free distribution or tasting: the customer can taste or test a product, often at a booth with a brand ambassador, who can provide information about it.

2. Testing a product or service temporarily : for example, if you sell software, you can offer a temporary license, so that your target can see what it is about and make their decision before buying the paid version.

Use case: you want to attract the largest number of customers possible. They can then test the product risk-free.

This is ideal for the launch of a new product.

Price reduction

It is an undeniable lever to sell more! A method that seems simple, but actually involves many techniques:

• Direct discount : you offer a price reduction applicable immediately at the checkout. We also speak of IRD, for Immediate Reduction Voucher;

• Coupon: "out-store" coupons are provided beforehand in magazines, by email, mail, or on the internet. They encourage your prospects to go to the store to buy your product. You can also provide coupons directly in-store;

• Mail-in rebate: following their purchase, the customer has the possibility of being reimbursed for part of the sales price. They can also get a refund in the form of a gift card, which pushes them to buy again. The standard term is MIR, for Mail-in Rebate;

• Quantity discount: for the same price, your customer gets a larger quantity of the product. You also have the option of doing multi-pack sales.

Use cases: The primary goal is to encourage impulse buying, which will contribute to increasing your revenue.

You can also use this technique if you need to increase your sales on a particular product, to be able to clear stocks, or in case of a sales deficit.

Setting up an introductory offer for a new product is also a good way to attract your target customers.

Finally, with an appropriate POS display, like shelf talkers, you will stand out from your competitors.

Risks and constraints associated with price reductions

When it comes to offering discounts, certain risks must be known and managed:

• Avoid having a product on promotion too often. This would push your customers to wait to take advantage of the next promotion before buying. In this case, your profit margin will take a hit, and sometimes even your revenue;

• In France, the EGalim law regulates promotions: your distributor has the obligation to apply a minimum margin rate of 10% on food products, and therefore will not be able to offer your products at cost price;

• Similarly, discounts cannot exceed 34% of the sale price on food products, with the exception of perishable food products threatened by rapid deterioration (products with short shelf life);

• Finally, selling at a loss is strictly prohibited.
  
  

Gifts: loyalty points in exchange for another product

Simply put, you are going to give a gift to your customers!

The gift item can take different forms: it can be samples of one of your other products or that of one of your partners, or promotional merchandise (branded with your logo).

There are different ways to claim the gift.

• Direct gift : your customer can, for example, find it directly in the product packaging, like a magnet in a biscuit packet. I think you or your children have nice memories of computer games or demos offered with the purchase of a cereal box.

• In-store event : in the case of a commercial in-store event, your brand ambassador can offer the gift at the time of purchase;

• Post-purchase gift : your customer goes to the supermarket reception desk once they have finished their shopping to claim their "prize";

• Deferred gift: here, you rely on a loyalty point system. Your customer collects points or proof of purchase. Subsequently, they send them to you in order to get their gift. This system is a good way to lead the customer to make repeat purchases;

• Direct self-paying premium: the consumer must participate financially - but for a very limited amount - to obtain their gift. For example, the customer buys a PC and for 1 more dollar they get the computer sleeve;

• Deferred self-paying premium: a technique that resembles the direct self-paying premium, except that in this case, your customer buys the product, and will subsequently have to send you a proof of purchase with the financial contribution to get their gift.

Use cases: if you are looking to build customer loyalty, this is the most suitable promotion method, as it encourages your customers to make repeat purchases.

The gift is also indicated if you want to promote another product of your brand. Adding a sample can also help regulate your inventory issues.

Contests & Giveaways

This promotional technique allows your customers to participate in a game to win a prize: one of your products, an item, a voucher, etc.

You can opt for different formats, with or without purchase obligation:

• Spinning wheel to get a prize;

• Scratch cards;

• Simple sweepstakes;

• Survey followed by a sweepstakes draw.

Contests in supermarkets can seem complicated to set up, because this technique involves certain constraints, such as writing rules and terms. However, consumer laws have been eased in many regions. Filing the rules with a bailiff is no longer mandatory in many cases. Likewise, in the event of a draw, it is not necessary to be under the supervision of a bailiff.

Using a bailiff or legal professional remains, however, highly recommended if you wish to set up high-value prizes, to avoid any problems in the event of a dispute.

Tip: the draw also gives you a pretext to organize another in-store event!

Use cases: this technique corresponds to different scenarios:

• Pique the curiosity of new customers.

• Launch a new product: so as to make it known and have it tested.

Ensuring the smooth running of your promotions in supermarkets

Now that you have determined your objectives, established a promotional advertising plan, and chosen the actions to implement, all that remains is to put it into practice!

‍Here too, we will suggest some best practices to promote the smooth running of your promotions at points of sale.‍

To begin with, keep in mind that the optimization of these various promotions usually requires good product staging.

Furthermore, as with all your marketing or commercial actions, you must proceed in chronological stages to ensure the smooth running of your promotional action plan.

The engagement phase

The engagement phase, also known as the promo sell-in, corresponds to the period during which the promotion is offered to stores. The objective here is to convince points of sale to adopt the promotional operation.‍

To validate this step, your sales representatives enter the key promotion information directly into their mobile CRM:

• Event dates

• Duration of the promotion

• Type of promotion

• Packaging/Ordering (number of cases ordered)

• POS display ordered

• Etc…

This is also when the ordering of POS and highlight displays must be placed. This anticipation is essential to guarantee on-time delivery and ensure optimal execution in-store.‍

The setup phase

Also called the implementation phase, this step corresponds to the actual rollout of the promotion in-store.

The field sales managers play a key role here: they must visit the points of sale to verify compliance with negotiated agreements and guarantee optimal placement. In concrete terms, they ensure:

• Adherence to the merchandising plan

• Pricing compliance

• Presence and proper setup of POS and in-store displays

• Availability of instant coupons (BRI)

• Etc…

To ensure effective follow-up, it is essential to take photos of the shelf once the promotion is installed. These visuals will make it possible to monitor execution, compare with findings at the end of the operation, and adjust future actions if necessary.

The review phase

This final step allows evaluating the execution and the actual impact of the promotion in-store.

For effective follow-up, check the key elements:

• Actual quantity sold (actual case count)

• Presence and setup of POS and in-store displays

• Audit and field feedback from teams

• Etc…

Take photos of the shelf and compare them with those taken during the initial setup. This will help you identify any gaps and adjust your future operations.

Equipping your field sales managers

To guarantee the success of your promotions in-store and track each step of their rollout, it is essential to equip your sales force with a mobile CRM specialized in retail/supermarkets. Such a tool allows you to track sales in real time, measure the impact of your actions at points of sale, and keep control over field execution.

A CRM equipped with data collection features facilitates the work of sales reps by allowing them to save time on-site, centralize essential information, and avoid any data loss.

Finally, it ensures smooth communication between headquarters and the field, making it possible to quickly transmit updates on promotional actions and in-store events.

Measuring the performance of your promotions

Tracking the impact of your promotions is essential to evaluate their effectiveness and adjust your marketing strategies. Here is how to measure and analyze your promotional performance to maximize your results.

Analyze your competitors' promotions

Understanding your competitors' promotional strategies allows you to identify market trends and optimize your own actions. During field visits, your field sales managers can observe:

• The highlighting of competing promotions (facing, price, POS displays).

• Price elasticity and the impact of price cuts on sales.

• The most attractive offers for consumers.

Regular competitive intelligence helps you adjust your campaigns and anticipate market fluctuations.

Track your operational results

Two indicators should be closely monitored:

• Sales efforts (number of emails sent, calls made, visits completed, etc.).

• In-store execution (setup of in-store events, respected highlights, POS displays in place).

By analyzing this data, you can adjust your objectives and verify the engagement of your sales teams.

Evaluate the impact of in-store events

Ensure that your promotions are properly set up and that they generate traffic. To do this:

• Use field audits to verify proper execution (presence of POS displays, available stocks).

• Analyze photos taken in-store to guarantee consistency in the execution of the campaign.

• Verify the duration of the in-store event and its compliance with trade agreements.

Analyze sales performance

The ultimate goal is to understand the actual impact of promotions on your sales:

• Compare sales before, during, and after the promotion to evaluate its effectiveness.

• Analyze remaining stocks and breakage/shrinkage to adjust your future orders.

• Segment your points of sale (best performing stores vs. new stores) to measure the effectiveness of promotions across different distribution networks.

Track your promotion rate

The promotion rate measures the impact of promotions on your overall sales:

In retail, this rate fluctuates between 20 and 40% depending on product categories. It is crucial to compare it with:

• Your margin rate, to avoid a loss of profitability.

• Your promotional revenue, in order to measure the actual effect on your sales volumes.

If your promotion rate is too high compared to your margin rate, it may be necessary to adjust your strategy to avoid excessive reliance on promotions.

Optimize your promotional strategies

Analyzing your results allows you to refine your campaigns and improve their profitability. Use this data to:

• Identify stores where promotions perform best.

• Adjust your offers based on buying behavior.

• Better manage your stocks and avoid out-of-stocks.

A well-executed promotion is not limited to an immediate sales boost; it also contributes to retaining your customers and strengthening your position on the shelf.