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Trade marketing: Getting to grips with the bottom line

by Gregoire Lemaitre , 12.10.2016

As a manufacturer or retailer, you will invest heavily in marketing activities at the point of sale (POS). But do you, like so many in your sector, lack confidence in your investment decisions? Do you struggle to know to what extent you are achieving a healthy return on your spend? Well, let’s get to grips with what’s actually driving the bottom line.

The impact of promotions

From our research with brands across the world and multiple sectors, we know that retail promotions are having an impact on consumers. When we asked shoppers what influences their buying decisions, retail promotions ranked as a key factor. 44% of shoppers cited information at the shelf as influencing their shopping decisions, slightly ahead of in-store displays and product samples and demonstrations, both at 41%.

Consumers are increasingly price sensitive

We also know that today’s Connected Consumers are increasingly price sensitive. As a result, promotional activity is intensifying in a bid to woo bargain hunters with ever better deals. More than half of all shoppers (58%) compare prices between stores, an unmistakable sign that price is a key influencer of purchase. The message is clear: consumers pay attention to promotions and so you need to as well.

Making the right investments

You know that well-timed and executed marketing activities can close sales. But with so many possible activities to choose from, the difficultly lies in understanding which investments will deliver the greatest return on investment (ROI).

If your life wasn’t complicated enough, the challenges you face around price, promotion and distribution are further exacerbated by the fast-paced omnichannel environment.

In order to succeed in these highly competitive conditions you need to have a sophisticated understanding of which activities are actually driving your bottom line. You need insight into all elements of your and your competitors’ pricing, discounting, assortment and promotional activities both online and offline. And you need to understand how shoppers experience your product in context.

Armed with such intelligence, you will be empowered to prioritize your budgets and select those retail executions that will drive sales and achieve real ROI. Furthermore, by integrating this information with real sales data, you can close the feedback loop and create winning strategies that will benefit you and your customers.

Share your thoughts by emailing gregoire.lemaitre@gfk.com.

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