Drive specific shopping behaviour by optimising the promotional mix
The traditional linear path to purchase of awareness, consideration, purchase and re-purchase has crumbled in the face of internet searches, price comparison sites, social media and a multi-channel retail approach. This endless access to, and bombardment with, differing messages is all having a profound effect on how people shop. In sectors where it is difficult to establish real differentiation and price, service, quality and convenience no longer seem to be enough, many retailers and brands are at risk of becoming ‘commoditised’.
Therefore it is increasingly important to identify the right combination of promotional dials to turn. By marrying commercial and marketing objectives to customer needs defined by actual shopping behaviours, the promotional mix can be optimised accordingly and help influence customers to include your outlets in their new path to purchase.
It has been well reported that major mass promotions such as Black Friday and Cyber Monday can be effective in driving short term sales uplifts – but that there seems to be little incremental gain beyond the promotional period. So, ideal for building footfall but the dials need adjusting when the business objectives are focused on more specific goals: for example, increasing loyalty and spend with existing customers through cross or up selling; pushing particular categories; or developing an outlet as a destination for particular shopping missions. Here different combinations of promotions and media are needed to encourage the desired shopping behaviour.
Ironically, the technology which appears to have complicated life for marketers also helps personalise the shopping experience by increasing the individual promotional relevance – and hence strengthens the bond between retailer, brand and customer.
Understanding the impact of different promotional tactics
Working on this approach with a major grocery retail chain, emnos used extensive customer data to identify the effect different media and types of promotion had on shopping behaviour within key groups of categories and customer segments. Only then could the high impact, short term uplifts generated by mass promotions be viewed in combination with the longer term, loyalty building effects of targeted campaigns – and the optimum promotional mix be established.
For example, radio proved less effective in driving sales in all segments except Premium and Traditional Home Cooking shoppers, where it over indexed against benchmark by 22% and 11% respectively. Billboards worked better amongst Health and Convenience customers where it over indexed by 16%. As was expected, positive impacts from mass media promotional activity were short term.
Targeted, direct marketing print and digital media campaigns performed exceptionally well with VIP and frequent shoppers – underlining the premise that this approach supports longer term goals rather than increased footfall.
The resulting analysis also showed how the different elements of the promotional mix performed against a number of pre-defined business objectives – thus enabling optimisation of future campaigns to support these objectives and increase ROI. Promotional messaging can also be adjusted in terms of which products and next best products to lead with, based on needs, price sensitivity or shopping mission.
By understanding customer shopping behaviours, it is possible to develop precise and relevant objectives and an appropriate mix of promotional techniques.