Promote or die

Unlike Northern Hemisphere markets where they get two distinct key selling periods, summer holidays and Christmas, whereas we have the two combined. Maybe it's time to lobby the government to move either Christmas or summer to June/July. We won the Rugby World Cup and we got the 2010 Football World Cup so anything is possible…

International retail trends
I spent a week in New York in June and a week in London in September walking the streets and malls looking at retail. Looking for trends, changes, new thinking, and something from which we could learn. What is the secret for future success in South Africa? What is the golden key to increased sales, market share and profits in competitive retail markets? We can read about other people's analysis of retail but there is no substitute for experiencing retail as a customer.

There was one thing that stood out in both markets and that's price and promotion. Having a well-established brand is no longer enough – Levis, Guess, Marks and Spencers, Adidas and everyone in between are running retail price promotions.

Specialty stores with wide and deep stock holdings are in danger of becoming obsolete. Discounters now stock the top five best selling everything: from video games and books to music. They cut the prices and use these as loss leaders to get consumers into their stores. It's then up to the in-store experience coupled with powerful point of sale to steer the consumer into multiple impulse purchases.

Promotions are the weapons of choice

Maybe the effects of rising interest rates are taking hold on the consumer. Perhaps the lack of store window differentiation due to mall regulations and product differentiation due to increased production in the East, or the movement towards market domination by heavy discounters. Or the effect of virtual branding where consumers prefer one brand but buy the one on offer. However, everywhere I went I saw some type of product promotion.

There were “buy one get one free” promotions, “get 25% extra for the same price” and even market leading brands were offering the customer added value.

Every window display now includes prices. With discounters like Wall Mart in the US and Tesco in the UK (Tesco announced profits of over 1 Billion UKP while I was in the UK) still dominating the markets, this is a trend that is not going to go away. It's disappointing - but a fact.

Entertain your customers

Differentiation at retail is becoming more difficult for retailers as virtual branding takes hold and manufacturing becomes polarized in the East. It seems retailers are moving towards promotion as a differentiator. The key to success is the extent to which the specific promotion engages the consumer in a way that reflects the companies brand positioning: you want consumers to taste, feel and experience your brand promise as a precursor to purchasing.

The good news is that there are a bunch of forward thinking companies in South Africa that are already harnessing the power of the well executed sales promotion. An example of this would be the current campaign from GrandWest, Live Like A Millionaire. Lucky winners can stand the chance to experience the life of a millionaire. The brand fit is perfect and offers consumers a taste of what they can experience if the win big at GrandWest. This campaign is generating a lot of street buzz which adds to the effectiveness and relevance of the campaign.

Promotions must excite and entertain

I spend a lot of time preaching the power of a well-crafted sales promotion to our clients and the most important criteria for a successful promotion is its ability to entertain the consumer. We see the power of this in our sister company Creative Licensing Plus., the exclusive agents for Warner Bros. and Cartoon Network entertainment brands for Southern Africa. Consumers are willing to pay to be entertained (movies, music, nightclubs, sport). If your sales promotions and marketing campaigns do not entertain, excite and engage they will surely wither and die along with your sales.

When it's all said and done, it comes down to basics. The trusty sales promotion has been around since the industrial revolution and the emergence of the “Four P's”. A lot of time is spent talking about the media revolution and the digital revolution. But if your sales promotions aren't kicking butt then the rest of your marketing mix is going to fall flat on its face. Get excited about sales promotions, excite your customers with your sales promotions and the land of milk and honey will surely be yours.

Alan Radmall is CEO of CLP and PROMOTIS. Alan has over 30 years experience in advertising and marketing and is considered one of the leader in retail strategy. Alan can be contacted on 083 313 5399 or visit http://www.promotis.co.za.