IT Solutions for More Complex Promotional Offers

By: William Morrell, CTO, Aptaris

William Morrell, CTO, Aptaris

Many consumers consider shopping a type of sport. They hunt for big discounts, search social media sites for sales, check apps, clip and download coupons, and look for BOGOs—buy one, get one free or half off. These simple promotions focused on percent discounts have historically been enough to drive traffic in-store or online.

Now, manufacturers are asking retailers to provide more complex promotional offers that increase spending and basket size, build brand loyalty and raise awareness of additional product lines and categories. In fact, manufacturers are likely to give more financial incentives when promotions are tied to shopper-specific marketing that drive sales across multiple departments. They are empowering retailers to give more enticements to frequent shoppers.

"Knowing consumers’ purchasing habits, how they prefer to shop, when and why are critical to profitability and growth"

Faced with products that go across many different categories where a retailer may discount an entire product line—such as Star Wars, Disney, or other themed campaigns—complex offers can actually simplify and prevent over-discounting. The ability to view basket-level transactions will deliver more rewards, resulting in higher profit margins for retailers plus satisfaction for loyal shoppers. That’s the reason for an increased focus on complex promotional offers by key retailers.

Examples of complex offers include:

• Buy chips and get dips
• Purchase a video game console plus controller and get a free video game
• Shop $50 with a retailer and get $5 back
• Spend a certain amount and get bonus points on your gas card

Rewards for Purchase

Another option for a complex promotion that allows brands and retailers to maintain price integrity is the use of digital rebates and gift cards. These money-back programs attract shoppers while preserving margins and inventory levels.

According to a survey from Kelton Global, 44 percent of shoppers said money-back programs, such as rebates and cash back, were the most attractive promotions enticing them to make a purchase. In fact, the majority of 35—44-year-old consumers (73 percent) had used a gift card to make a purchase in the last 12 months. Also, discounted gift cards and digital rebates were one of the top five ways consumers said they liked to save money, behind sales and coupons.

Loyalty through Exclusivity

Another complex promotion involves loyalty programs. Creating exclusive experiences strengthen brand loyalty. It’s been proven that rewards for frequent shoppers turn purchases into habits and even guilty pleasures.

An excellent example is Nordstrom’s Anniversary Sale. Loyal customers are given early access to the once-a-year event that has turned into a cult following.

Sephora also caters to frequent shoppers with a loyalty program that allows them to earn points and trade them for samples of beauty products and access to brand new cosmetics and events. The retailer also offers exclusive deals, such as discounted gift cards and free gifts with a purchase.

Managing More Complex Promotions

But managing these complex promotions can be a daunting task for many retailers. When offers require merchandising hierarchy and sub-classes of multiple categories, a robust database and centralized resource are vital to processing the variable SKUs that change seasonally and from campaign to campaign.

Without a solution to manage the complex promotions, retailers are using primarily manual processes to manage discounts with multiple spreadsheets of SKUs, price lists and campaign stats. The result is massive amounts of duplicated efforts and an inability to view information in a timely manner to impact business.

Enterprise Marketing and Promotions Management

The expertise to manage the data deluge resides with CIOs and their IT Departments. They must support the data collection and interface with marketing, advertising, merchandising and finance teams. Unfortunately, within the retail promotion and advertising processes there are disparate systems that become a headache for IT executives to manage and integrate.

Today, software and promotions management systems are available for IT to share the data with internal and external stakeholders, allowing more impactful promotions that can be adjusted quickly according to shoppers’ response.

The more sophisticated platforms include a centralized repository and database for all promotions. These systems have the ability to manage customer data and cross-reference buying patterns for more personalized offers. This capability to spot trends activates dynamic marketing processes to generate greater sales and raise margins.

At minimum, the promotions management package should deliver seamless integration of marketing, merchandising and creative teams. The collaboration across departments will streamline event planning and speed campaign development while eliminating extra work and errors.

For merchandising, the promotions tool kit allows direct collaboration between vendors and retailers’ marketing teams. With real-time, accurate data, it’s easy to view, compare, and evaluate offers based on financial forecasts and historical performance data. These solutions will optimize planning and maximize vendor funding.

Personalized Promotions

The majority of retailers are still tied to mass promotions. But consumers are demanding highly customized and relevant messages in their preferred media. The IT department owns the information from loyalty programs and past purchase data that will inform more effective promotional campaigns.

Knowing consumers’ purchasing habits, how they prefer to shop, when and why are critical to profitability and growth. When CIOs breakdown siloes in organizational structures and connect multiple data systems, they can make better use of big data to assist their teams in fine-tuning merchandising and marketing strategies. Collaborating more closely, they can improve promotions, messages, communications vehicles and be more creative. Not only does it reduce wasted hours across an organization, but it drives a more concise marketing message and greater clarity for the consumer.