Any fool can reduce prices to stimulate sales increases?
However it takes a smart retailer to use promotions & events to stimulate sales and still make a good profit?
So, if you’re still blindly just going down the first option only then you really need to transform your promotional strategy?
However, let’s take a step back and ask why do we use promotions, particularly price reductions? The simple answer is because the products won’t sell at full price, or at least as quickly as we would like them to. In the customers eyes they are not good value. Products that sell are seen as good value.
Now let’s understand value, as opposed to price.
Good value or bad value can be at any price point. It is simply the balance of the perceived value of the customer and whether the actual price is higher or lower than this.
Now, logically on the back of this there are 2 types of promotion that change the value proposition and can stimulate sales.
Firstly there is the price reduction…to a point where sales increase. However so that we don’t all fall into the role of…”any fool” there are in fact a myriad of price promotions that we can use as opposed to just lowering the price – from multi-buys, all one price, the more you buy and so on.
Being a clever retailer means knowing which price promotions work for you and which give you increased sales for the minimum loss of margin. That’s the clever part and that’s how VM-unleashed can help by identifying which promotions can work for you.
The second way to stimulate sales is to “add-value” to a product. This is the “sexy” part of retail where display, graphics, interaction and store design can be used to make product look special. Additionally there might be really good messages and secrets about a product that should be communicated to add value and justify the price.
Never underestimate these positive promotional activities simply because what you sell…
you will sell at full margin.
VM-unleashed begin transforming your promotional strategy by benchmarking your prices – there may be a good reason why you need to reduce items, then we work on the most profitable price promotions for your brand, and then we help identify messages, benefits and visual ways to add value to your ranges.
Promotions isn’t a theoretical exercise…it’s a learning curve, so let’s put these promotions in place, measure & monitor their impact and build the successful ones into our retail calendar. Let’s have a promotional plan of action.
So now, what about you?
Are you still comfortable with your promotional strategy, or you feel money slipping through your fingers?
Are you in need of a promotional transformation?