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Best Guide to Retail Promotion Strategy for Business Growth in 2022
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September 21, 2020What is Retail Promotion Strategy?
Retail promotion strategy is nothing but activities undertaken to induce customers by providing them with incentives, offers, deals, and other such things. It consists of advertising, publicity, personal selling, and direct marketing as elements to increase sales and build a brand image.
A good promotion management strategy helps bring in new customers and retain existing ones. Most importantly, become on top in this competitive market. A retail promotion strategy is a part of the marketing mix and includes both in-door and out-door efforts. These efforts can be both customer-oriented and business-oriented.
Every Retail promotion strategy program aims at increasing the sales of the retailer like Pharmacy POS, Gift shop pos system, Optical pos. It helps in improving customers’ interest in the product, creates awareness about the product, builds the brand, and then eventually converts all this into sales. The retail industry uses several techniques to achieve the same.
How Does Retail Promotion Strategy Differ From Advertising?
Retail promotion strategy is done for a limited timeframe, whereas advertising is a continuous ongoing activity. A Retail Sales Promotion in retail is a direct means of reaching out to the customers for sale while, on the other hand, advertising involves indirect methods to appeal to prospective customers. Any sales promotions ideas give quick results and aim for short-term benefits, while advertising gives slow results and aims for long-term benefits.
The Main Objectives Of Retail Promotion Strategy Are:
1. Encourage Stop and Shop:
It aims to attract passers-by so that they stop, enter the retail store, and take a look at the products. Once the customers enter the store, inducing them to buy products by attracting them with the prevailing deals and appealing displays.
2. Increase the Size of the Purchase:
Retail promotion strategy efforts also aim at luring customers to buy in greater quantities through the existing deals, offers, and discounts and thereby increase sales.
3. Repeat Purchasing:
Retailers use a Retail promotion strategy to make customers buy goods repeatedly.
4. Fight Competitors:
Due to the ever-increasing competition, businesses can survive only by being a better choice for customers. Besides, efforts on retail marketing ideas speak a lot about your competitive strategy. These are the efforts that help you stand out from your competitors.
5. Inventory Reduction:
When the Retail promotion strategy is effective, it helps in-stock clearance as customers tend to engage in buying more and repeated buying due to low prices and cost-effective deals.
The Various Types of Retail Promotion Strategy in the Retail Industry Include:
1. BOGO (Buy One Get One):
Buy One Get One method is used to increase the footfall of customers. It offers two products at the price of one. In some cases, a monetary discount is given on the second product. This method is widely used at the time of stock clearance. It tries to encourage more sales by offering more to customers.
Some examples of BOGO might include providing a complimentary product with the main product, for example, offering a free face wash with a face scrub. On the contrary, another BOGO example is offering two same products at the price of one. For example, one pair of jeans is free with the original purchase of one pair of jeans.
2. Percentage Discount is a part of Retail Promotion Strategy:
This is the most used and most effective technique for Retail promotion strategy. Loyalty programs like percentage discounts attract new customers without spending much on marketing techniques. Moreover, it also sometimes helps in converting the existing inactive customers. At times, when the discount offer is for a limited period, it encourages prompt buying among the customers.
For example, 60% off on all items, 50% off on selected items, etc.
3. Multi-buys:
These are offers in which one or more items are offered at a special discount, which would not be applicable when they are purchased separately. Customer reward program attract customers to make additional savings and hence help in sales conversions.
However, the success of these offers depends on the type of product being sold. For example, buy three t-shirts, get one free or buy two t-shirts, get two free, etc.
4. Free Shipping:
This is one of the most popular methods used by e-commerce platforms.
They attract customers and encourage them to make more and more sales transactions.
For example, buy worth USD 100 more to avail of free shipping.
Such offers increase sales considerably.
5. Multi Save and Conditional Promotions:
They go like “Buy and save off on the entire deal,” “Buy and then save on some items,” “Buy some and get a discount on some,” and such other schemes.
Such a retail promotion strategy encourages customers to check out multiple products and then avail offers available on them. They do not add a loss burden on the seller, either.
For example, buy one product and get 20% off on the second product.
6. Retail Promotion Strategy Through Coupons and Gift Cards:
It is the technique where the buyers are given a discount in the form of a reduction in price through a coupon with that feature.
A coupon mostly offers any other sales promotion method through it. On the other hand, Gift Cards contain a pre-set amount of money, which can be used by the gift card receiver to buy things from the brand. It is a popular gifting item in today’s times.
7. Try Before you Buy:
Using this method, the customers get the product at their place, are allowed to try it, and then decide if they want to go ahead with the purchase.
It brings the experience of physically checking the product without making a store visit and before paying for it. Trial periods are also provided to give customers the time to decide.
8. Social Media Contests and Giveaways:
Brands can organize contests on social media handles and give out products for free to the winners.
This has a two-way impact.
Firstly, the reach of your brand increases. Secondly, the customers get to try the products and may become potential buyers if they have a good experience.
How To Decide On The Right Retail Sales Promotion Technique?
1. Trial and Error:
By this method, you can experiment and see which technique works out the best for your business. It helps you test the technique that will bring you maximum sales in a practical scenario. However, it is also a time-taking method as the outcomes are to be checked and compared before finalizing the best technique.
2. Set your Objectives:
Every technique has its own perks. Before choosing any, you should sit down and decide the bottom line of your Retail promotion strategy efforts. ‘What is it that you are aiming to achieve?’ – is a very important question whose answer you should figure out before deciding upon the method you want to follow.
3. Plan the Incentive and Values:
It is also vital that before you settle for any technique, you calculate and plan the monetary aspects of it. It will help you review the cost of your method and contemplate whether you can afford it or not.
Once you decide the technique you wish to follow; the next step is to improvise and ensure its effectiveness. This could be done by taking the following measures
4. Set a Timeframe:
Define the period for which the ongoing promotions management will prevail. This brings in a sense of urgency in the customers and helps in quick sales conversion. Furthermore, limit the availability so that customers make a quick decision on the purchase.
5. Offer Various Promotions Together:
It helps to grab shoppers’ attention and promote the products well.
6. Provide Multiple Payment Options:
Being flexible with payment options is also a very effective way to increase sales. In this way, customers can purchase through various payment modes, and it does not restrict them.
7. Define the Target Audience:
It is also important to define the market and audience you want to target in order to channel your efforts and increase their feasibility.
8. Evaluate the Results:
You should also keep a close check on the results of your activities and review them from time to time. This helps you understand places where you are going wrong and improve them to earn greater profits.
Therefore, retailers must put great focus on their Retail promotion strategy as these accelerate sales, serve as the base for competitive advantage, build customer loyalty, and increase the frequency and volume of customer purchases.
Ari Retail Promotion Strategy Management
We provide practical solutions for implementing retail sales promotion. Ari retail software automates the business processes and enables businesses to achieve desired results. Our sales promotion strategies help the clients to fight the competition in their industry, attract potential customers to turn into customers, and increase the shopping bag size of existing customers.
