Running promotions should not be seen simply as a group of random items placed together at a lower price. Nielsen C-Store data says “Consumers will respond strongly to promotions as seen by a 14% growth in promoted unit sales, which is over four times the rate of growth of non-promoted unit sales”. They must have data-driven decisions to make them effective. According to Susan Viamari, an analyst for SymphonyIRI Group “More than 76% of consumers actively look for the best value when buying snacks.”
Gaining a competitive advantage on consumer purchases is always a driving force of motivation for operators and we want to drill down on the best way to make promotions work for you to create lift in the market!
Avanti Markets Inc. has developed a backend system that supports a variety of promotions, which has proven to drive sales and lift in the market. The feature allows operators to customize promotion campaigns to specific locations/accounts. Each location may have drastic differences in demographics and product needs; therefore, having the flexibility to custom fit promotions is a benefit to keeping the consumers engaged at the market.
Communication to the consumer is KEY. Promotions can be ineffective if you are not communicating to the end user correctly. “C-Stores have been taking a lesson from other competitive channels and are incorporating more compelling promotions to drive greater in-store sales. Items sold with more common, low-effort Temporary Price Reduction (TPR) promotions drove 8.1% and 11% growth for like annual periods. However, product displays, which typically enable a higher level of shopper engagement, grew by 30% and 27% over the same time frame.” Nielsen. Shelf strips, running commercials on the kiosk, and utilizing the Market Activity/Billboard Display are other tools that can be used to communicate promotions at the market.
Buying habits and demographics can influence the promotions you activate. Depending on the location of the market and the amount of the people it services that will help influence how many promotions you should run at that location. Review the locations buying habits to determine what are the driving products. Create a plan of action with a promotion calendar and run the promotions anywhere from 1 week to 1 quarter. Encourage the customers to try new products, consider a happy hour sale. This helps drives consumers to the market during the slowest time of the day, for example you can provide 10-15% off between 1- 4 pm. Other promotions that can be ran in micro markets and examples of those types are:
- Buy X Get Y – Buy 4 Kind® bars Get the 5th one Free
- Discount Percentage – Fresh Food Friday 15% off all fresh foods
- Discount Amount – Buy 3 Mars® products get $1.00 off total price
- Buy X for a set dollar amount – Buy 2 Redbulls® for $5.00
Analysis of Avanti Markets Northwest promotion results. Operators have found that promotions have been extremely beneficial with sustaining lift in the market, specifically creating individual product lift. Avanti Markets Inc. sister company Avanti Markets NW has partnered with Unified Strategies Group (USG) to run these promotions over the last three quarters. We have found lift in sales on each of the items that were placed on promotion. It also gives them a foundation to build personal campaigns for each location.
While stagnant promotions run the risk of losing a customer’s attention we have found most consumers stick with a campaign to redeem their free product. Outlined below are examples of USG promotions that were running in AMNW Seattle during Q2 compared to Q1 when the promotion was not running, showing the lift in product sales.
Data pulled from a market sample of 217 AMNW locations:
Promotion A – Rice Krispies 2.12 oz. (Buy X Get Y)
- Product: Looked at Rice Krispies Treats 2.13 oz.
- Total Sold Units in March: 1462
- Total Sold Units in April: 1677
- Lift: 14.71% Product Lift
- The product was not on promotion in March, but then was a part of the new set of promotions that started April 1st.
- Promotion Details: Buy 4 Rice Krispies Treats and get the 5th one FREE
- Total # of Redemptions: 55 during the month of April
Promotion B –Grandmas Oatmeal Raisin 2.5 oz. (Buy X Get Y)
- Product: Grandmas Oatmeal Raisin 2.5 oz.
- Total Sold Units in March: 886
- Total Sold Units in April: 965
- Lift: 8.91% Product Lift
- The product was not on promotion in March, but then was a part of the new set of promotions that started April 1st.
- Promotion Details: Buy 4 Grandma Oatmeal Raisin 2.5 oz. and get the 5th one FREE
- Total # of Redemptions: 68 during the month of April
Promotion C – Munchies Crackers Cheese & PB 1.42 oz. (Buy X Get Y)
- Product: Looked at M
- Total Sold Units in March: 965
- Total Sold Units in April: 1195
- Lift: 23.83% Product Lift
- The product was not on promotion in March, but then was a part of the new set of promotions that started April 1st.
- Promotion Details: Buy 4 Munchies Cracker Cheese & PB 1.42 oz. get the 5th one FREE
- Total # of Redemptions: 34 during the month of April
Goal is to utilize promotions for both individual product lift and overall market sales increase through engaging the consumer to visit the market frequently. For any promotion the goal is to create not just product lift, but overall sales lift in the market. The promotion examples above were all running at one location in Seattle, WA, the location experienced lift not only on the products that were on promotion but also experienced an increase of sales by 7.6% in the month of April. Temporary price reductions (promotions) can have an in-store effect whereby consumers may be induced to make unplanned purchases of the promoted products. It is claimed that almost 60% of household supermarket purchases are unplanned and the result of in-store decisions (Inman and Winer, 1999). Keeping consumers excited about the market is what will keep them coming back. Giving incentives and making it an environment they want to enjoy will not only benefit them but also create lift for you as the operator.
Founded in 2009, Avanti Markets is the leader in the Micro Market industry. Avanti’s platform provides operators with a leading-edge micro market transaction system that leverages real time data to help support operational efficiencies. Avanti’s back end software integrates promotions and inventory management tools to control the flow of goods, pre-kitting systems that will drive operational efficiencies for route drivers, and data warehousing infrastructure to help operators understand their micro market business. The Avanti advantage creates a micro market experience that let’s the consumers determine how they interact and the operator increase revenues through every transaction. Visit Avanti Markets on Facebook, Twitter, LinkedIn or www.AvantiMarkets.com.
Reference
Inman, Jeffrey, and Russell Winer (1999), “Where the Rubber Meets the Road: A Model of In-store Consumer Decision Making,” Marketing Science Institute, working paper # 98-132.
