TIME TO GET PERSONAL

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TPRs have their place, but targeted, customized offers are the real key to successful promotion.


A new report from RSR in partnership with Symphony RetailAI reveals that as recently as 2019 almost two-thirds of retail “winners” still believed that price is their No. 1 business challenge. If the five supermarket fliers I get in the mail or inside my local newspaper each week are anything to go by, it appears they still think reducing prices is the best way to get a sale, despite all evidence to the contrary.

BUYER’S CHOICE

In today’s uber competitive landscape, “It’s no longer about what a retailer wants to sell, but what a consumer wants to buy,” says RSR managing partner Brian Kilcourse. So offering, say, frozen pizza at a hot price probably isn’t going to attract many shoppers who weren’t already planning to buy that pizza. Sure, it’s a nice surprise for those who were going to buy anyhow at the regular price, but it doesn’t spur any new trial — and now the manufacturer gets nothing in return for his investment. (I can’t tell you how many horror stories I’ve heard about one chain’s mandatory peak season BOGO on frozen pizza that, basically, just gives existing customers a free pie on the manufacturer’s dime.)

Instead of scatter-shot mass promotions, says Kilcourse, retailers should target the right consumers with the right offer at just the right moment. He adds that the right offer doesn’t necessarily mean the lowest price. The goal is find the optimal price for that particular customer, based on everything you know about her. “A hot price doesn’t drive loyalty; delivering highly relevant customer-centric value does.”

According to RSR, personalized promos can be synced with customer preferences, their tendency to buy different products and the basket size that accompanies certain promoted items. The idea is to make it easier for customers to redeem the deal than to ignore it like they do mass promotions. Another benefit: competitors can’t copy personalized offers because they’re, well… personalized.

Manufacturers that fund promotions also come out ahead when the offers are customized. Not only is the total investment lower, but spending is more efficient. Plus, programs backed by AI solutions and robust analytics can be tracked, analyzed and tweaked as needed in order to achieve sales and profit goals.

Yes, these sorts of programs can be costly to implement, but can you really afford to wait? A good first step is to rethink your loyalty program, says RSR. If its only purpose is to act as “an anonymized coupon,” it’s long past time to start using it to better understand your shopper. Implementing market basket analytics is another important step.

It’s a brave new world, but retailers that hope to compete in it, have to change with the times.

IDDBA SHOW CANCELED

If you haven’t heard by now, the 2021 International Dairy Deli Bakery Association (IDDBA) show scheduled for June 6 to 8 in Houston has been canceled, due to the ongoing pandemic. Plans are already underway for next year’s event in Atlanta, June 5 to 7. Meanwhile, the National Frozen & Refrigerated Foods Association (NFRA) is hosting a virtual Executive Conference from April 19 to 21 that will feature a full slate of live expert speakers. Visit nfraweb.org for more info.

TPRs have their place, but targeted, customized offers are the real key to successful promotion.

A new report from RSR in partnership with Symphony RetailAI reveals that as recently as 2019 almost two-thirds of retail “winners” still believed that price is their No. 1 business challenge. If the five supermarket fliers I get in the mail or inside my local newspaper each week are anything to go by, it appears they still think reducing prices is the best way to get a sale, despite all evidence to the contrary.

Denise Leathers

Denise Leathers

Denise is the editor of Frozen & Refrigerated Buyer.

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