Home and away: how to win at promotions everywhere and reward customers

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Current promotions management strategies are obsolete in a world where retailers are now trading across more and more channels, territories and devices. Robin Coles, EMEA managing director of XCCommerce brings the story up to date

Coles: retailers with visibility of promotions running across channels can give customers exactly what they want

Retailers and brands are expanding into new territories and channels at an unprecedented rate. Direct to consumer (DTC) ecommerce sales in the US alone in 2020 reached $111.5 bn and are expected to pass $129 bn in 2021. Source Statista adds that by 2023 this could reach $174.98 bn. And they are exploiting the reach enabled by digital to trade across borders in territories with a thirst for global brands.

Supporting this growth will often depend on the use of ever smarter promotions but management of those promotions inside most retail businesses has not changed in 20 or more years. Shocking as this might sound, consider why this is the case. First of all, the core promotions themselves have not changed all that much – money off this, buy and this and get that – so the culture and systems around them stood still. Moreover, while the number of devices and channels retailers use to sell has exploded, they simply ported the same promotion types across; even if the front end looked different, it was same tired thinking at the back with an infrastructure that simply could not keep up with the creative skills of the modern marketer.

The same strategy, or lack of, applies to selling outside home territory. This is partly to do with the fact that most trading across borders is now done digitally, so third parties are often doing the heavy lifting on franchise management, local fulfilment and checkout and payments. In truth though, this is actually more channels and the attendant complexity.

The result is lost opportunities. While retailers are focused on the incremental sales they get by adding new channels and devices, the promotions are not set up to drive the business forwards. This is even before anyone adds up the cost of managing the complexity of trying to manage promotions from scratch as each new channel, attendant system and device is added. Add to that the cost of lost opportunities as retailers are unable to respond to new business opportunities because it takes so long to make changes to the promotion and its execution.

In short, the one brand, one channel, one device, one market at a time approach is well past its sell by date. But the bad news does not stop there. Alongside conventional promotions sit conventional execution tools, notably the spreadsheet, the store’s point of sale system and the software residing on the ERP and the ecommerce systems. What starts badly then only gets worse, and while they are immersed in trying to just keep up, retailers are then unable to respond to the customer’s desire for new and innovative promotions or fuel planned expansion into new channels and territories.

The solution is clear, being a single promotions management platform that sits between the multiple promotions that retailers want to run and the various channels they want to run them across. At the heart of the system is the ability to define an offer using rule sets that encompass customer and loyalty, product and basket combinations, coupon and voucher applicability, applied in any channel, segment, retail tier, geography or IT platform.

And by automating the key processes involved, promotions can start to deliver more revenue across their main KPIs – customer satisfaction, average order value, lifetime value, returns and stock turn.

Automation also cuts across the limitations of legacy systems both ERP and point solutions from different vendors, not by removing any of them but by extracting what data is needed for overall promotions management and then enabling these point solutions to perform better, often extending the life of aging systems in doing so .

Automation is a step towards personalisation; once retailers have control and visibility of promotions that are running across channels they can remove the inconsistencies in each channel and give customers exactly what they want. And they can do this without wholesale systems changes, or costly IT involvement.

This visibility then enables retailers to see which promotions are not performing, remove them and then introduce new ones quickly. From this firm foundation, they can start to recover lapsed or inactive customers that they have been unable to get round to. Using this approach multi brand companies can use one solution across the entire retail organisation to manage and execute promotions across multiple markets and channels to drive conversions, basket size and return visits all with sub second response times.

What could be simpler?