Retailers have got promotions all wrong, Revionics
52% of retailers’ weekly or monthly promotions go to customers who would happily have paid full price. That’s according to a Revionics-commissioned survey conducted by Forrester Consulting.
The research, which questioned 1,250 consumers in the US, UK, France, Germany and Brazil, also casts doubts on retailers’ hope of recouping margins by raising prices on limited-stock items. When asked how they would react if an item they wanted was available at a higher-than-expected price, nearly 60% of respondents said they would wait, not purchase the item at all, purchase it from a different retailer.
Using science-based pricing and promotions to meet customers’ expectations and provide relevant offers when and where they matter is key to both shopper satisfaction and long-term business health, Revionics argues. The research notes: “These incessant and poorly targeted promotions create a climate of perpetual abundance and undermine the customers’ sense of urgency to buy. Instead of wasting money and resources on indiscriminate campaigns, retailers should focus on personalised and timely promotions. Retailers should use customer insights and data science to design the promotions that are most appropriate for different groups of customers in context.”
Revionics Chief Marketing and Strategy Officer Cheryl Sullivan says: “Today’s shoppers worldwide are incredibly savvy and discerning. Retailers who want to effectively reach their customers with meaningful prices and promotions must embrace a science-based approach now if they want to remain relevant and competitive.”