Trade Promotions in Shopper Marketing: The Vital Last Step in Path to Purchase

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“Shopper Marketing” is arguably the most important facet of marketing on the path to purchase. Once a consumer enters a store, they’re primed to buy, in what we call “shopping mode,” predisposed to making purchases. In this moment, a shopper often hasn’t decided what items they’re going to buy or in what quantity.

Consider that 70 percent of purchase decisions are made in-store, and 68 percent of those purchases are made on impulse, according to Deloitte. For this reason, shopper marketers, brand, and retail sales teams structure their shopper marketing strategy (everything from displays, sales, packaging, and promotion) to influence that consumer’s purchase decisions.

How You Could Use Trade Promotions

An important tactic in shopper marketing is “trade promotions” and are usually redemption offers. Examples include:

  • buy-one-get-one (BOGO)
  • discounts for registered shoppers (e.g., grocery savings cards)
  • “redeemable now” coupons attached to products
  • complementary cross-sell offers (buy this product, get a deal on another product).

When done right, trade promotions reach the consumer at the right time (on the shopping trip), at the right place (point of sale), with the right message (offers to suit their needs)—driving purchases and increasing basket size more effectively than most other marketing or promotional campaigns.

The Importance of Segmentation in Shopper Marketing

A challenge in shopper marketing is creating offers that match the target consumers’ needs, desires and buying tendencies. This challenge is met by segmenting shoppers and tailoring promotions for each segment.

An example of this segmentation is deciding whether to target “grab and go” shoppers who are buying a little for a specific purpose (e.g., a meal) or “pantry stockers” who are buying more.

 

For the grab-and-go shopper, cross-sell offers often work best. For example, if someone is looking for a taco kit, an on-pack offer for a discount on salsa could influence them to buy one taco kit over another. Likewise, an offer for a discount on milk could influence a decision about which cereal brand to buy.

While the grab-and-go shopper is focused on convenience and offers on complementary products, the pantry stocker, however, is looking for value on purchasing in bulk which is why offers focused on allowing for more volume per dollar spent, such as a BOGO offer, is more likely to be effective.

Understanding such differentiations enables marketers to develop appropriate strategies to target the right segments of consumers. Astute brands are increasingly working with retail marketing teams to design promotions that take advantage of this insight into buyer behavior.

Controlling Risk

Another challenge, for both brands and retailers, is protecting themselves against over-redemption if an in-store promotion proves more popular than expected. The way to avoid this risk is to take out redemption insurance that will cover higher-than-anticipated discounts.

Takeaway

Most consumer purchase decisions are made in-store, making the retail environment an ideal place to offer complementary cross-sell or buy-one-get-one type redemption promotions. Structuring these offers correctly requires insight into consumer behavior, and promotions targeted to suit their needs. For over 25 years, Insured Creativity has worked with brands and retail marketers to design end execute award-winning shopper programs.

Dylan MacTavish,Business Development Manager, Insured Creativity.

DYLAN MACTAVISH

I’m the Business Development Manager at Insured Creativity.

To talk more, you can email me at 

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