Promotions are a key element in any retailer’s arsenal of tools to help drive customer traffic. They are especially important during the holiday season. And, in an economy still fraught with uncertainty, some customers are hardwired only to purchase products on sale. Promotions are crucial for retailers to communicate when new products are available and when they are offering discounts for the items their shoppers want to buy.
During the festival season the retailers concentrate on how to tackle their promotional plans to capture market share and increase profitability during the most important selling season of the year. Their goal is not only to drive up traffic to their brick-and-mortar and online stores, but also to grow their customers’ average basket size for each transaction.
However, two major shifts in the retail landscape are changing the way companies think about the way they plan promotions. Consumers are no longer relying on print ads, circulars, coupons and flyers and are tapping into new avenues to find deals on products they want. Social media sites – like Facebook – are gaining attention for their ability to help businesses accurately target the right audiences with their promotions. Over-reliance on traditional forms of advertising may hinder a retailer’s ability to reach new and existing customers. Secondly, the onslaught of data that retailers now have access to via loyalty cards and online sales has led to the realization that promotions should not simply be an arbitrary effort to increase traffic and reduce stock levels. Rather, promotions should be an integral part of their overall planning process.