Theme Your Storewide Sales Promotions

Kroger’s in the U.S. holds “Cart Buster Savings Events.” Woolworths in Australia has “Two Day Super Sales,” while Columbia’s Éxito's features "Días de Precios Especiales.” These are highly advertised promotional events in which deep discounts are offered for a limited time on a wide range of a store’s item categories. They are retailer-specific rather than being held like industry-wide Black Friday sales. The discounts are received immediately rather than from a shopper accumulating loyalty program points.
     How can these storewide sales promotions be made most profitable for the retailer? Toward answering that question, researchers at University of Amsterdam and Tilburg University analyzed key profitability indicators over a period of 200 weeks for such events held by four Dutch grocery chains. Results were compared to those at three Dutch grocery chains which did not conduct these sales.
     There are reasons to believe storewide sales promotions aren’t profitable. Regular shoppers might choose to delay purchases until the time of the big discount and then stock up on enough to last until close to the next event. New customers might be drawn in by the deep discounts, but most of those people could be bargain hunters who move on to another store when prices revert to normal. In addition, although a low-price image builds store loyalty, the frequency with which a shopper sees discounts influences price image more than does the discount sizes. A low-price image for a retailer arises from frequent shallow discounts on a limited set of items to a greater extent than from infrequent deep discounts on a wide range of items.
     With the research taking all this into account, there was one characteristic of storewide sales promotions which made them most likely to be highly worthwhile for a retailer: A theme which is broadly publicized. Attention to the event is enhanced and attention to the retailer is prolonged beyond the time of the sale when there’s an integrating theme.
     Other research indicates that visually distinctive themes work best. Dutch retailer Albert Heijn's storewide "Hamsterweek” promotions are advertised with images of a hamster dragging bunches of buy-one-get-one-free merchandise from the store. In fact, visually striking themes help any sales promotion event. Still keep in mind that there are visually strong promotions where shoppers might subsequently wish they could unsee. Germany’s Priss hosted the ultimate come-as-you-are event. The first 100 consumers received a €270 shopping spree—if they shopped nude.

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