Sunday, March 1, 2009

Wanted: Effective Promotions

These days, consumers are more reluctant than ever to part with their hard-earned cash, and virtually every store is offering deals and discounts to get them to spend. We’ve been working with a few retailers to better understand how and what to promote in order to sell more units per transaction at full price (or at least, at less of a discount).

Viewing promotions through a basket-analysis based lens reveals how in touch retailers are with their customers. Take the email I received today from Target, and their most recent store circular. The subject line of the email reads: “Live large: Spend $125, SAVE 15%, plus FREE SHIPPING on select furniture.” The copy is tone deaf to the times. No one is “living large,” and conspicuous consumption is out. Who is Target talking to? How are they responding? Not well, I suspect.

Clicking through to the weekly ad raises more questions about Target's promotions effectiveness. The front and back covers are squandered. The covers should be all drivers proven to add items to the shopping cart. Page 1 is all about towels, sheets and pillows on sale. Are towels a driver for Target? Do pillows sell sheets? If so, then featuring sheets is a waste of real estate, and discounting them is a no-no. The back has a random assortment of food SKUs – not a big statement about Target’s commitment to the food category, which I keep reading about.

The insides of the weekly ad insert don’t seem to be working as hard as they could, either. They should feature drivers and not discount draftees on these pages, too. Pages 2-3 and 4-5 are furniture and related accessories. The office furniture spread attempts to sell “get organized” but the merchandise doesn’t really support that theme. The rest of the circular features random items and touts the great prices being offered on high-ticket items that are value-priced.

Page 17 is the closest thing to a category statement where Target is attempting to own “Clean.” It features 16 well-priced items merchandised together under the banner “Affordable, Clean Fun”. I’m guessing these actually are drivers in all seasons – people come into the store to buy them year round. Good move to promote them with a story behind them. Too bad they’re buried inside the circular.

All in all, the email and circular are a miss. And one Target probably can’t afford right now.

Who do you think is doing promotions well?

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