Why is Promotional Display Planning So Far Behind In-line?
Retailers should know that no two stores in a retail chain are the same when planning promotions. Yet major retailers are treating them exactly the same for all their stores.
You might have noticed, from time to time, when entering a store, that it’s again time for another weekly promotion. Quite often it can be seen by sheets of paper attached to the end of each Gondola, and those who take the time to review them can usually find single-bay planograms and titles of the plans like; “Bay #X NATIONAL”, “Bay #Y ENGLAND & WALES”, etc.
A 2015 study by IRI found that more than 50% of goods sold in UK Supermarkets are sold on some kind of promotion. Yet major players in the industry are treating their promotions exactly the same, either for all their stores in one country or even all stores globally. Why is this? Do they think consumers throughout the world react in exactly the same way to promotions?
It’s strange. It’s almost as if grocery retailers aren’t spending $BNs on consumer insight data, loyalty card data, clustering, planogram localization and targeted marketing, even pushing bespoke offers to each of us through our mailboxes, email and smartphones. If all this investment and effort are only being applied to less than 50% of the sales, aren’t retailers missing a huge opportunity? In the early days of big supercenters, managers were given the power to create their own promotions and, to a limited degree, some chains still do this. But as buying, planning and distribution have become more centralized, it’s not hard to see how store-focused promotions have become harder to do.
Retailers should know that no two stores in a retail chain are the same and that the differences in terms of space and assortments can often be quite stark. Yet this is not apparent for all it seems. When looking at the vast technology that retailers have access to, it’s hard to find excuses for not optimizing promotions. If searching for the right tools, retailers would quickly find that there is a range of solutions available to help them apply category management to their promotional areas in much the same way they do for their inline shelves.
For instance, by analyzing the behavior of shoppers at an item level, stores can be clustered according to the categories and promotion types that work best. With the right tools, it’s easy to produce promotional planograms to suit any area of the store, right down to having the appropriate promotional and display ‘pizazz’ detailed on the planogram. And using planogram automation, it’s simple to select the right products for each store. So instead of just picking the ‘five most popular yogurt flavors nationwide’ to put on promotion, each store can have the five that sell best in that particular store. Sound’s obvious, right? Still many retailers aren’t doing this.
WITH THE RIGHT TOOL, IT’S EASY
Sometimes half the battle is overcoming the idea that a particular challenge is difficult. Certainly, many of us freeze when confronted with the tidal wave of information needed to do something like localizing promotions. That no longer needs be an obstacle. Localizing promotions is no more difficult than personalizing the rest of your store space, and the potential benefits are so large that I’m confident it will soon be a retail standard practice.
So forget about the idea of it being too difficult, we have shown that it can be done successfully.