As a supermarket category manager and a supplier consultant for the last 10 years, I shouldn’t continue to be horrified by a conversation on promotions that ends with “…the same ones we did last year” – but I am.
I have been there, doing the same promotions as last year, and the year before that, and the year before that. And what’s more, if it wasn’t for the changing corporate rules, they would be exactly the same promotions. I get it – it’s easy to just repeat the same promotions and managing a category is hard.
This is a plea for the poor appendix, which once used to digest grass and now sits there until the last voice it can have in life is when it screams, puts you in intense pain and then exits stage right through an operation. As far as I know only a few categories have had that operation and no longer promote at all. For the majority of categories that remain, my experience has led me to one valuable insight – ‘RAP’ your category. If you get the Range, Availability and Promotions right, your category will perform well.
Promotions can bring new shoppers to your category, motivate current ones to buy more, and encourage people to try new products. This isn’t news. Yet despite knowing that promotions are a powerful weapon in the armoury towards driving sales, we spend little or no time using this weapon well.
Like a lumberjack sawing down trees, our promotions-saw became blunt years ago, yet we keep sawing with the same tool hoping it might just do a better job. In fact, there are three essential things to know: How much do we spend on promotions each year? How much do we get back on promotions each year? And what are our objectives for promotions this year?
Ideally the promotional programme needs to be seen like a three-legged stool, because only when the supplier, retailer and shopper are happy can we deem each promotion a success. This means that we need to be measuring each promotion from the retailer, supplier and shopper’s perspective. This leads us to the next challenge of making choices and choosing what measures to use from the plethora of data that is available. Add to this the ‘noise’ that is also going on in the category, and be careful not to fall into the trap of so many others before – getting stuck in ‘analysis paralysis’.
Making tough choices is the hard part. We must then decide how we measure the performance of a promotion and accept that it will neither be 100 per cent accurate nor contain all the information – but all this is better than not doing it all, which is where we are now.Please don’t leave your promotions to become the appendix of your category.
Darren Smith worked for 12 years a category manager at Sainsbury's, before founding supply chain consultancy Making Business Matter, which helps suppliers get the most out of supermarket relationships.