I do love this time of year in Malaysia as it is holiday time. Well, to be truthful it has been holiday time for quite a while now. Every discussion revolves around holidays and these discussions take on many different faces. It could be the “what I am planning to do with my days off”, it could be why something can’t be done until after Chinese New Year and for many it will be the excuse for missing forecast. The latter always amuses me given the fact we know when CNY will fall and although the timing changes it is hardly a new invention! The final topic and my favorite is always around what exciting promotions will happen at my local supermarket. This one can be discussed in the office, with clients or just with friends over a drink.
Over Christmas we did see the occasional good promotion in our local supermarket and I was guilty of buying cheese that we really did not need (or had never heard of) or a bottle of wine because it had a free glass attached. This type of activity in the main works, as my consumption habits did change as some of the wine was better than the normal vinegar I drink so I may continue to buy it. However, I also have a bathroom full of bath liquid and shower gels and although the cat appreciates a more upmarket wash, I will not need to buy for another year… or the next promotion window. Whilst this is great for me as a shopper, I wonder, from the point of view of the brand owners, what exactly is the point of most of this activity? It simply does not work!
Our office is now full of tins of chocolates and biscuits that we bought at ½ price. at Christmas – the fact that they are still here suggests that they haven’t driven much incremental consumption.
So what is in store for us now…
I guess more of the same but a new promotion period for CNY and I am particularly excited about buying my beer over this period. My annual stock up! In fact it so sad that I am actually in London as I write, but have left the order instructions with my friends. They have been told to hit the lowest price and then buy… my version of the stock exchange!
Trade promotions – winners and losers
For me… Overall, I am happy as a shopper. I have bought at great prices, have plenty of stock, a happy cat and don’t have to worry about shopping for a while. However, that is me speaking as a shopper.
For retailers …the equation is better, primarily because if they are heavily funded and shopper patterns are changed (outlet selection).
For the manufacturer… Not so good. To the marketers, key account managers and trade marketers, the upsides are questionable to say the least. My normal shopping pattern was disrupted slightly, but other than the wine, my consumption behavior in the long term has not changed at all and only had a blip short term. So most of these promotions don’t work for manufacturers – all that is happening is shoppers are buying beer or other products at lower prices.
For Supply chain experts… the losses they suffer is worth another discussion.
So what does this mean?
To all the great sales people out there remember that selling more only helps in the short term if you get it right. Getting more stock into the retailer isn’t enough. Getting shoppers to buy more is better, but not the complete answer. True value comes from changing shopping behavior in a way that changes consumption behavior too. As a consumer, I have to either want to consume more, consume more frequently, consume something new and then I will either shop more, shop more frequently and may switch to a new brand. If not it is all wasted and expensive. There are enough promotion techniques that can do this, but choose the right one! If all that fails at least forecast the right volumes so it is not sold off at ½ price later on.
Finally, all of this reminds me that having just run a successful workshop on Aeon Carrefour in December I am glad our next one is on “effective promotions”
Happy Chinese New year