In this ebook, you’ll learn:
Welcome to “Increasing ROI From In-Store Promotions”
How promotions can
increase market share
Let’s dive in!
Tips and practices for
promotional execution
Ways to measure
your promotional
effectiveness
Why do brands do promotions? The answer is twofold:
either to or to
.
Growing brands will be in the second group. After getting on a retailer’s shelf, you’re focused
on building up your sales.
To build sales, you’ll need to attract buyers. And in most cases, those buyers will be coming to
you from other brands on a retailer’s shelf. They’re trying you out.
This idea of winning new buyers from other brands is called “taking market share”.
defend their market share gain market
share from the competition
Why do brands do promotions? The answer is twofold:
either to or to
.
Growing brands will be in the second group. After getting on a retailer’s shelf, you’re focused
on building up your sales.
To build sales, you’ll need to attract buyers. And in most cases, those buyers will be coming to
you from other brands on a retailer’s shelf. They’re trying you out.
This idea of winning new buyers from other brands is called “taking market share”.
defend their market share gain market
share from the competition
On day 2, your brand goes on sale. 100 people come into the
store and each person buys 1 unit of pasta sauce.
sells 40 units.
sells 20 units.
sells 40 units!
On this day, your brand’s market share increases to 40%!
Because of your promotion, more people are trying your brand
and increasing awareness. Customers are saying the following
things:
“I’ve been waiting to try this!”
“I heard about this on TikTok.”
“I’ve been waiting for it to go on sale, I’m not sure if I’ll like it.”
Brand A
Brand B
Your brand
On day 3, your brand goes off sale. 100 people come into the
store and each person buys 1 unit of pasta sauce.
sells 45 units.
sells 25 units.
sells 30 units.
By reducing the price, your brand temporarily attracted a
wider audience of buyers. Some of them stuck around, and
now your base level of sales increased, as well as your
market share.
Brand A
Brand B
Your brand
Now imagine this cycle repeating itself every day for the rest
of the year. Each day is a battle between brands fighting for
buyers to purchase their product instead of their competitors.
Over time, the cumulative effect of these promotions alters
the market share of each brand.
To stay on the shelf, it is each brand’s responsibility to
develop and execute promotions that align with their goal of
either protecting or increasing their market share.
Effective promotions have three main inputs: discounts,
length, execution, that drive toward four main inputs: items,
depth, timing, frequency.
Items
Pick the items that best
respond to promotions
and contribute to
incremental sales.
Timing
Choose which time of
year to run your
promotions. Consider
seasonality or the
competition’s
promotional calendar.
Frequency
Determine how many
times a year you
should promote your
products.
Depth
Select how deep the
discount will be from
the everyday price.
The Four Main Inputs for Promotions
Items, depth, timing and frequency are the main levers of a
promotional strategy. But be aware that the actual execution of
the promotion in-store is a big factor for success. Your items need
to be in stock, on the shelf, and tagged as on sale. If any of these
conditions are not met, then all of that hard work you put into
planning the sale could be derailed.
It is good practice to check on the store conditions during sales
with your team or a trusted partner like a broker. This increases
the likelihood that you will identify external factors that may be
dragging down performance.
Evaluating Promotional Execution
When a product goes on sale, syndicated data divides
the volume into two buckets.
Base sales are “what you would have sold anyway” in
the absence of a promotion. Base sales are calculated
from a running average of the last couple months of
everyday sales.
Incremental sales are “new sales resulting from your
promotion.” This is what we attribute to your
promotional activity.
Incremental vs Base
$
$
$
$
$
$
$
$
% Lift measures the impact of a promotion.
% Lift is calculated as:
There is no magic lift number, but you can
evaluate how “good” or “bad” the lift
percentage was by comparing your brand’s lift
to other promotions you’ve done or a
competitor’s promotions.
Lift is the Output
Incremental Sales
Base Sales
( )
x 100
4,990
4,123
6,223
4,243
7,274
4,461
7,936
121%
147%
163%
172%
4,606
Lift Base Units Incr Units
