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Promotion planning: make them relevant to shopper needs

2015-08-21 - David Sables is CEO of Sentinel Management Consultants - sales negotiation advisors to leading fmcg suppliers
Source - The Grocer

Selling in grocery is not just selling a product or a promotion - it includes selling a plan and sometimes a vision. In some categories and customers there has been an overnight change in buyer style to one of collaboration, which has stumped and mystified some suppliers, as they’d grown used to surviving the transactional game.

Actually, it just proves what an act all the tough stuff is. It’s a huge relief to the ones that found it uncomfortable on both sides of the fence. With short-term focus on commercial income waning, there has never been a better opportunity to bring some growth strategy into category plans. Yes, range culling is rightly in place and your cat man skills are important there, but let’s look at promotion planning. Too many promotions are irrelevant to shoppers. In a blanket attempt to get higher penetration, shoppers are hit with things they don’t buy. We’re trying to sell them shampoo when they have no hair, and toothpaste when they have no teeth. Perhaps the biggest offence is multi-purchase deals that lock a shopper out of the category for a longer period. As well as huge supply chain costs, these also cause increased waste. You must have repeatedly thrown away half a bag of salad, most have.

So ensure there is promo strategy expertise in your business. If you don’t know what ‘expandable consumption’ is, you are lost. For your category ask: if the consumer has more do they use more? Soft drink and snacks - yes. Toothpaste and toilet roll - no. We all know that for strategic category growth you should not run loading deals on non-expandable categories, and we’ve known it for years. But many of the promotions out there are breaking that rule. Still suppliers present them, and retailers accept and run them. It’s not all the fault of suppliers. A cross-category corporate position of 3-for-2 is a strategic nonsense. That’s like shouting out loud ‘our strategy is to be non-strategic’. It’s tactical: suppliers just want to lock people out of brand switch for a while and retailers are the same.

Now is the chance to change it. The big brands should win at this but their lack of agility and ability to adapt is crippling and creating an opportunity for own-label and smaller suppliers. So go for relevant promotions, whoever you are.

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