Find the ideal balance in your marketing activity
The stellar performance of Q4 2020 shows that when supply is limited and demand remains high, retailers do not need to get into a promotion-led bidding war to attract customers.
In this market environment, the retailer’s skill is to offer enough appealing and relevant deals to fulfil customers’ appetite for a bargain, but not to overdo it.
Shoppers have become accustomed to shortages, and they have shown that they are prepared to pay higher prices as they prioritize their need for certain products.
In 2019 – a year we can describe as “normal” in terms of promotional levels – 12.7 % of all unit sales were made with a price reduction of 15% or more. The graphic below shows that in 2020 there were fewer price promotions because of the high demand for TCG products in many categories.
In 2021 we have returned to a more ‘normal’ situation but still on a lower level than pre-pandemic. Currently we are experiencing a phase of increasing prices so we expect that aggressive price promotions will increase substantially once supply challenges are mastered. Also, current promotions are being added to prices that are already higher.
Your price promotions will be most effective when you use market intelligence and sales performance data to optimize discount levels, duration, and timing. Track the monthly development to ensure you remain competitive, while at the same time protecting your margin by avoiding over-discounting.
Levels of discounting vary considerable across the multi-week peak season. See week by week if your sales uplift outweighs your promotional spend to adjust fast.
Get the insights with the Seasonal Peak Monitor.
