Promotions and discounts are significant elements of achieving retailers' goals, be it getting rid of excessive inventory stock, increasing basket size, driving traffic to the store, or keeping customers satisfied. With over 60% of goods being on offer constantly, sales promotions are a new norm.
We all love promotions. From a consumer perspective, apart from saving money, promos have another crucial feature: the novelty effect. Visiting the same hypermarket every weekend can be boring, and while grocers cannot afford to change assortment every now and then, they can entertain consumers with new deals.
- How often retailers need to update promos to keep this novelty effect?
- How often they need to rotate assortment on promotion?
- When is it the right time to run a promo?
- How many promos do retailers need to maintain customer loyalty without becoming an ultimate destination for cherrypickers?
Ideally, pricing systems would answer all these questions and present a planner with a number of alternatives and their combinations. However, existing price optimization software just doesn't account for promos and item cross effects that follow. Consequently, promotions may jeopardize - and even cannibalize - sales of other assortments.