Over the last few years retailers have focused on and operated categories on a promotional multi-buy platform, usually within the structure of the category due to operational complexities and restrictions.
What we have begun to see more recently is a greater cross category promotion aligning complimentary categories, single price point offers and basket drivers such as $2 for an extra item.
What this has done is start to deliver a greater satisfaction of the promotional offers and drive a value perception across multiple categories.
Driving consumers in-store
The Shopper Tracker program has investigated trends around the broadening of offers and what this has meant for satisfaction and what it is doing to shopper participation in these offers.
There are two types of promotions; ones that drive traffic into store through outdoor advertising, and those that happen in-store at the point of purchase.
Traditionally, convenience stores have not been strong at driving traffic into stores through promotions, however, as retailers have begun to shift from a heavy focus on fuel to that of a shop we have seen some change happening.
Over the last three years shoppers have moved from a negative six per cent to a positive four per cent of shoppers agreeing that promotions are driving them to a convenience store, representing a 10 per cent swing.
Key categories that have driven this swing include energy drinks, sports drinks, frozen carbonated beverages, liquid breakfast/protein drinks and boxed chocolate.
Retailers can certainly create excitement around categories liked boxed chocolate with aggressive low margin promotions to create excitement and point of difference.
So, with all the changes happening in promotional offers how does the shopper rate the special offers they are seeing in-store?
Well the answer is positive with a nine per cent swing in the last two years, from 17 per cent in 2014 to 26 per cent in 2016. This is a significant change in momentum as previously the ranking had been stagnant.
Once again we see the largest beverage category – energy drinks – lead the way with 49 per cent satisfaction, followed closely by boxed chocolate at 48 per cent; sports drinks, 44 per cent; frozen carbonated beverage, 42 per cent and liquid breakfast/protein drinks, 41 per cent.
What is key here is that four of the five (excluding boxed chocolate) are all highly planned traffic drivers to the store, so satisfying shoppers is very important.
The last measure of success for promotions is; are they driving incremental volume?
In 2014 and 2015 the incremental value for all the work done on all categories was a total of one per cent. Now, while this may sound low it did vary greatly by category and some categories need to be promoted to be seen.
So now with the varying offers the jump has been staggering with a net favourable of 15 per cent, a significant increase of 14 per cent in one year.
Again, the key categories driving this are energy drinks, 46 per cent; liquid breakfast/protein drinks, 37 per cent; lolly bags 35 per cent; and cola CSD 33 per cent.
We also saw a bolter on the back of some innovative launches and aggressive pricing on block chocolate, with a net favourable of 48%.
In summary, the different promotional mechanics are working, the shoppers are engaging more and incremental sales are happening! Keep up the great work.
Note: Net Favourable scoring is based on a 9-point scale with those agreeing rating a score of between 7-9 and those disagreeing rating 1-3
Brett Barclay is the director of Convenience Measures Australia and program director of Shopper Tracker Convenience.