Are promotions worth it?

The issue of price is much discussed and is certainly of grave concern to those operating in the independent sector. However, the latest Cash Carry survey by him! has thrown up some interesting facts in that only 28% of customers questioned who had purchased items from the beer, confectionery, petfood/petcare, cigarettes and bread categories noticed a promotion taking place “at this C C today”.

Moreover, the survey shows that customers were not really looking for promotions and/or they couldn’t see those promotions that were available.

According to him! chief operating officer Tom Fender this could be because the products on promotion were tertiary lines or maybe just weren’t relevant or were not merchandised in such a way as to make them eye-catching.

Of the 28% who did notice promotions three in five bought a product as a direct result of the promotional offer with the most favoured promotional mechanic being a temporary price reduction (this attracted 59%) extra quantity free (11%), BOGOF (7%), price marked packs (9%) and buy two get a third free (2%).
When it comes to shoppers surveyed in the Convenience Tracking Programme 2004, only 8% said that they had bought something on promotion at the independent store where they were questioned. Of that 8% the favourite promotional mechanic was temporary price reduction (52%), extra quantity free (25%) and two-for-one (16%).

In other words temporary price reductions attract more attention and get bought more and simple promotions, that don’t add complexity to the shopping decision, seem to be the most popular. “This in turn must beg the question ‘why offer anything different at all?’,” says Fender.

At the cash and carries where the survey took place, 79% of respondents said that they looked at the profit margin information on shelf tickets or brochures and 88% said that this information influenced their decision to buy. But
Fender asks: “Is this profit margin information which is so key to the purchasing decision always clear, impactful and visible?”

Of the cash and carry customers surveyed 47% said that they offered beer price promotions in their stores (although some 13% said they never did so). Fifty nine per cent never offered bread promotions instore – only 11% admitted to always offering bread price promotions. Thirty per cent never offered confectionery promotions in store, 34% said they did “sometimes” and 17% replied “always”. Similarly 37% never passed on petfood price promotions, 23% did sometimes and 10% did always.

In answer to the question “what do you think of prices at this particular cash and carry?”, 43% said “it is dearer here than other cash and carries” when questioned about beer prices, 53% said “about the same” when asked about confectionery prices as did 49% when asked about cigarette prices and 5% when questioned about bread prices.

Eighty nine per cent admitted to buying a product with a price mark and an average of 77% said that they thought that the retail price of price-marked packs was generally competitive.

Only 18% of those surveyed said that they would switch from a product with a price mark to one that did not have a price mark while 39% said it was likely that they would switch to a product with a price mark.

Overall the survey showed that promotions are not getting noticed in cash and carries.

Customers have also shown a need for more value/margin information. This suggests that communication needs to be reviewed so that it is simple and more effective. And there is an overall need for better visibility and accessibility of all promoted products.

* Harris International Marketing, the consultancy which carried out the Cash and Carry Customer Tracking Programme looking at customers’ behaviour in depots, has been rebranded as him!, with the new logo also appearing in a speech bubble to highlight the need for better communication and the added strapline of “turning answers into action”.

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