When done right, promotions can provide a substantial benefit of 4 to 8 percent sales increase and 2 to 3 percent net income and EBIT uplift.Ĭonsumers, especially younger segments, have started to accept and even expect personalized discounts based on their shopping habits. Retailers can operate these at scale because technology has evolved, and customer touchpoints for data collection and communication (especially through e-grocery and loyalty apps) have increased in recent years. Personalized promotions have become more relevant and higher priority. When taking these factors into account, even the best grocers can expect 10 toġ5 percent of promotions to dilute sales and margins. Analytics now enables complex views of mass promotions, controlling for stock-up, cannibalization, and even the halo effect that promotions have on other products.
Leading grocers recognized long ago the need to reevaluate the true incremental impact of mass promotions.
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