In his presentation at the Bloody Big Drinks Summit, Simon Elsby, APAC Sales Director for Exceedra, explained what it takes to run a successful retail promotion in these unique times we’re living in.

“The liquor industry, it’s fair to say, in both Australia and globally, thrives on promotional activity,” he said.

“But we think here at Exceedra, much of that activity may well be wasted.”

It’s a bold claim, but one Elsby supported with reference to changing consumer habits in the wake of the pandemic. These are amplified by shifts within liquor industry categories, channels and data requirements, which have also accelerated over the last two years.

Elsby explained some of the crucial mistakes that retailers are often making – repeating last year’s promotional planning; using ‘one size fits all’ executions regardless of state, shopper or occasion; and poor data analysis and evaluation.

“Gaps in the data are also gaps in the knowledge of what works, and when, where and how,” he said.

Elsby believes that the result of these errors is wasted time and effort, alongside revenue and profits left on the table by retailers.

So what does the future hold for retailer promotions?

Elsby said some changes to consumer behaviour, such as an amplification of at-home and outdoor entertaining occasions, are likely to persist, even after the full reopening of on-premise venues.

Such changes to drinking occasions will require their own tailored promotion, with the continued growth of e-commerce in liquor retail likely to play a key role here.

Some drinkers are likely to have more disposal income after months of lockdowns and a lack of international travel, while others are more likely to be doing it tough, with limited income and periods out of work. Again, Elsby says: “One size no longer fits all.”

Physical retail promotions that actively respond to shopper behaviour and localised demand, along with those that simplify the shopping experience (with shoppers much less likely to browse post-pandemic), have a greater chance of success, according to Elsby and Exceedra.

By actively using the physical space, brands can possibly find an advantage over e-commerce, with Elsby giving the example of a T Gallant Prosecco fountain in Myer. This demonstrated the role of the physical store, providing both convenience and experimentation in a streamlined experience.

Retail promotion strategy

Elsby predicts that retailers will increasingly adopt a change of promotion strategy, whereby they aim to bring new customers to entire categories, rather than simply individual brands.

During the development of such strategies, Elsby says there are three major questions retailers should be thinking about:

  • What’s the promotion objective? Retaining or acquiring customers, or increasing brand share and awareness?
  • What’s the retail growth objective? Is it to increase footfall, spend or frequency of visit?
  • What’s the financial objective? Contribution to revenue, margin or volume?

Notably, Elsby said price discount cycles of different brands are no longer an effective single method of driving sales. Instead, retailers should attempt to use fresh promotion strategies that respond to the questions outlined above, while also being aware of seasonal occasion, baseline volume, brand on brand cannibalisation of sales, and other holistic store-back analysis.

Ultimately, Elsby is keen to stress the four key factors behind a successful promotion: planning, strategy, execution and differentiation. The greatest successes will be found by retailers who use the right promotion, for the right category or brand, at the right time and with the right frequency.

Different approaches will still be required from different types of retailer (banner group, independent or large scale chain retailers), and these will need to be tailored not only to individual states, but on a suburb by suburb or ‘micro-location’ level. Before rolling out any new promotion, retailers should have in place plans to measure and track the success of activation against KPIs.

Find more great insights from the Exceedra presentation and over 60 other industry experts in the Bloody Big Drinks Summit. Get an all access pass here to view all content on-demand until October 2022.

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