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How grocers can effectively run the right promotions in 3 steps

grocers promotions planning

Are you running the right promotions? Are you giving away too much margin?

Did you know that 89% of Grocers don’t have the data needed to analyze promotions? This means that many Grocers don’t know how their promotions performed, nor have an accurate reason for why they chose their promotions.

Though promotions have been around for as long as we can remember (the first coupon was introduced by CocaCola in 1888), analyzing promotions has either been pushed down in priority, deemed too complicated/time-consuming, or inaccurately executed.

As we continue to grow in technology, the number of platforms we utilize to share promotions will not only become increasingly complex to analyze, but will also be impossible to interpret manually.

The graphic below showcases the complexity of promotions for Grocers today:

Promotion Complexity

When running a single promotion a retailer is faced with hundreds if not thousands of different decisions. Just imagine how difficult this gets when you look at a grocery store with over 50,000 items. Take a Grocery store with ~100 locations, they are faced with over 325 million decisions for mass promotions and 1.25 trillion decisions for targeted promotions.

Wait... What’s the difference between mass promotions and targeted promotions?

Mass Promotion

Mass promotions target a wide variety of audiences, with the goal of appealing to as many audiences as possible. 

Targeted Promotion

Targeted promotions are aimed at specific groups by tapping in to their interests, occupation, location, age, etc.

So, how do you effectively run the right promotions?

To keep it simple, we have included three steps for Grocers to successfully run the right promotions. Each step will dive into the current problem and provide a smart solution.

1- Identify how effective your promotions were & be able to compare promotions

  • Promotional data is stored in disparate spreadsheets, which makes seeing a complete view of promotions unavailable to merchants and leadership. 
  • Spreadsheets are typically managed in different ways, making it difficult for leadership to compare promotions across categories.
  • Merging the data is time-intensive. Merchants and Analysts do not have the bandwidth for this task.
  • All of these factors result in Grocers only looking at promotions from a high-level perspective, such as sales, which can be deceptive or doesn’t share the whole picture.
  • Create a standardized process for planning and analyzing promotions. 
  • Bring all the promotional data into a single platform using advanced analytics and data engineering. This effort requires deep knowledge of retail and promotions to ensure the data make sense when presented to a merchant team. 
  • Analyze billions/trillions of data points to accurately maximize the margin or any other goal/purpose of the promotion. This is only feasible using advanced tools. 
  • Automate all of the data integration with systems, predictive analytics calculations and exception reporting.

2- Plan promotions across the organization based on a purpose

  • Promotion planning does not capture the purpose of the promotion from inception.
  • Not utilizing a system that supports collaborative planning. There are multiple groups involved: Merchants, Vendors, Marketing, Supply Chain, and Stores.
  • Retailers outline the purpose of their promotions and include multiple reasons. The planning process should capture the initial intent/purpose of the promotion. This should be built into the process throughout execution and analysis.
  • Have a single system with a standard process to allow for collaboration and comparison, given promotions typically require collaboration from multiple departments and categories.

3- Predict the impact of promotions and identify the optimal scenario

  • Not utilizing forecasting or analytics in planning promotions. Instead, promotions are based on a gut feeling or just a repeat of last year/season. Grocers only look at overall sales to determine the best promotions which can be deceptive. This can result in repeating bad promotions without even realizing they are bad!
  • Utilize AI and Machine learning to create optimal scenario calculations. The advanced technology takes away the headache of viewing millions of different options when running a single promotion.
  • Visualize projections on how a promotion will perform and run a what-if-analysis to confidently choose the best promotion..
  • Go beyond Point of Sale (POS) data to run promotions that drive business goals.

Start your journey with AI technology

There you have it, three steps to successfully run the right promotions. You may have noticed that there was one common ingredient within each step– smart technology. By shifting from disparate spreadsheets, to AI Technology, Grocers have the opportunity to not only run the right promotions, but also compete with big tech companies that are swiftly learning the ropes of retail. With the help of Cognira, becoming an expert in promotions and staying ahead of the competition becomes a reality.

Cogniras smart software ensures that you not only have the confidence in running the right promotions, but you have the opportunity to effectively collaborate with your team, visualize accurate reports all on one platform, and most importantly, continue to improve your relationship with your customer. Let Cognira turn your data into game-changing insights for the competitive advantage you need.
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About Cognira

About Cognira

Cognira is the leading artificial intelligence solutions provider for retailers. Cognira is passionate about helping retailers unlock valuable, transformative business insights from their data.

We know retail. We love data.

To learn more, check out our website at cognira.com or contact us today to get started. 

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