What do your customers really want from your promotions?
In the past 10 years of honing our pricing and promotions software, consulting services, and more, Revionics has been delving deep into the emotional psyche of shoppers to learn what type of promotions are most impactful. Our research has found that over half of retail promotions go to customers who would happily have paid full price. On top of uncovering this, Revionics’ has also uncovered what promotions and price points leave shoppers annoyed and/or less likely to shop at all. Read on for our research findings and expert insights on effective promotions.
One of the biggest findings in reports commissioned by Revionics is that indiscriminate promotions cost retailers. Shoppers globally prefer promotions that are personalized, thought out, and productive. In fact, retailers prefer no promotion to poorly thought out promotions. So if you’re current tactic is one-size-fits-all, it may be time to rethink that plan. Leveraging customer data insights can provide a wealth of knowledge for retailers into what kind of promotions certain consumers want, and which offers will be most effective for which customers.
There are also some interesting statistics surrounding retailer promotional channels. Research shows that on certain mediums shoppers are more likely to pay full price, while on others they prefer to wait for promotions.
If you look at the chart, you will see that 69% of shoppers said they would pay full price on email and social media, but less so in-store or on the website. Information like this can help retailers shape the multi-channel promotion strategy and provide offers where consumers want them most.
It is worth noting that many of the ineffective offers come via email. Perhaps because it is a marketing medium which retailers may find easy or inexpensive to use. Thus, the risk is lower for indiscriminate promotions.
However, email can also be easy and efficient for sending out personalized offers, if retailers are collecting information on consumer behaviors and engagement with different email communications. When customer data is leveraged for marketing and promotional messages, email can be one of the most effective mediums for successful conversions.
In addition to promotions from specific channels – 47% of shoppers said they would be aggravated to know that another shopper had received a better price point than them. Shoppers in 2020 are being careful and want to know that product price points are not arbitrary.
59% say they would refuse to purchase an item if they perceived it as such. Consistent with findings from earlier studies, consumers accept price increases or decreases that remain within the “fair” range if they are based on data science – that is, driven logically and not arbitrarily. One of the main ways that merchandising, and pricing teams can accomplish this is by utilizing artificial intelligence and machine learning pricing software.
Running More Effective Promotions
Powered by AI and machine learning tools, merchandisers can increase performance and better serve shoppers with carefully crafted pricing and promotions. Using data analytics can help guide retailers to make clear and confident pricing choices that meet customer expectations around while also achieving business objectives. Plus, it can also help retailers identify which promotions are most successful, so they can capitalize on further opportunities and improve the bottom line.