Many retailers will be crossing their fingers and hoping their Christmas wishes will come true this year. While Christmas is undoubtedly an important event for virtually every retailer, it does only come but once a year, and it is vital that retailers to operate smartly during the year if they are to succeed.
One way to ensure success is by capitalising on all of the events that take place throughout the year, and not just Christmas. Today’s retail calendar is filled with many more religious, non-religious and purely retail-driven events — think Valentine’s Day, Easter, Halloween and Black Friday to name a few.
Many retailers are tempted to capitalise on these events by running deeper, longer, and more frequent promotions. However, this can often be a double-edged sword. Getting hooked on mega promotions like these puts more pressure on like-for-like figures in subsequent years, and tends to lead to a conveyor belt of repeated promotional behaviour each year.
One way in which retailers can wean themselves off their over-reliance on promotions is by making use of more targeted promotional mechanics. Rather than offering everyone the same half-price promotion and squeezing already-tight margins, more targeted promotions aimed at specific customers can achieve similar overall performance, while reducing the total giveaway. Rewarding customers for their continued behaviour is far better than attracting droves of customers into store only when certain items are heavily discounted. This also protects the value of the brand, and creates a much healthier, more sustainable outlook.
This kind of thinking requires agility and the right technology in place to support targeted promotions. Having the right channels to deliver these messages to customers is also vital. Retailers need to capitalise on all their owned media channels to maximise their ability to offer customers more relevant and specific messages and offers. This should be across both paper-based channels (coupons, direct mail, magazines/leaflets, etc) and digital channels (web, email, apps, social media, etc). To make maximum use of these channels, it is fundamental to start with a data-led approach, using analytics to understand shopper behaviour and determine the right customer communications that will deliver the desired results.
When it comes to seasonal events, it is particularly important to have access to real-time data, and to use this in combination with shoppers’ historic purchase data to provide an overall view of the customer. This can enable retailers to make more agile decisions in-store and offer targeted sales promotions accordingly.
Here my three key recommendations for capitalising on seasonal events:
Data needs to be collected from every event — from Valentine’s Day to Black Friday. Only then can retailers look back and evaluate which promotions worked and which ones did not.
• Be proactive
By analysing real-time data, campaign teams can see which promotions are working and which are not before the actual promotion finishes. If results aren’t delivering against targets, then they can re-evaluate. Real-time data also gives retailers the ability to focus on certain products, meaning they shouldn’t have to resort to blanket percentage discount promotions.
• Be agile
If it takes months to plan a seasonal promotion and it doesn’t deliver, then it is a long wait to try another tactic next year. Real-time data provides the ability to move quickly. Tracking the performance of a promotion on a daily basis is important. And having the ability to be nimble and adapt the promotion is key. If stocks of a promoted line are predicted to be greater than planned, then increasing the depth of a targeted promotion can boost sales without having to slash prices at the point of sale.
Of course, delivering relevant promotions is all about knowing customers, understanding their behaviour and preparing for unusual or seasonal events.
Having a plan is important, but supporting it with real-time data is where you gain benefits by becoming more responsive and ultimately more relevant to your customers than the competition.