4 Retail Promotion Principals every FMCG Marketer should know

4 principals for retail promotion & marketing by Justin Tsui - strategic creative director

4 Retail Promotion Principals every FMCG Marketer should know

Retail Promotions are Every where

As a consumer, we come across all forms retail-marketing promotions almost everyday. Especially for those mass retailers like convenience stores, health and beauty stores, supermarkets, petrol stations, department stores, even fast-food chains and retail banking.

With my marketing experience in FMCG retail promotion and marketing, I’ve put together 4 Retail Promotion Principals that could help to guide retail-marketing campaigns, especially for those FMCG marketers who want to increase consumer’s basket size and shopping frequency.

Principal 1: Store Promotion = Create Reasons to Shop

For most of retail promotion efforts, there are only 3 main business objectives:
• Increase Sales
• Drive Brand Differentiation/Preference
• Build Brand Loyalty

And these objectives are delivery by transaction tactics like Increase consumer’s Basket Size and Increase Shopping Frequency. From acquisition perspective, the promotion need to attract new customers and at the same time retaining existing customers.

So the design of the promotion campaign is to provide some reasons for your existing customers to shop more products, more frequently, and attracts new customers to shop your store/brand instead of others competitions.

Principal 2: Reasons to Shop = Target Customer Incentives

This one is pretty obvious, and we all know incentives works for most customers if not all. The challenge is to design incentives that are most effective and relevant to your target customers.

In the world of retail or trade marketing, there are 3 main categories of incentives – FREE, WIN, SAVE. These tactics are widely use in all sorts of industries and marketing campaigns.

Successful marketing campaigns will usually combines the financial incentive with a psychological one that talks to heart of the target consumers.

Principal 3: Attractive Incentives = Target Consumers / (Premium + License/Brand) x Creative Theme

Giving out pure financial incentive is the most common form of promotion by means of price discounts, which is relatively simple when you worked out the numbers. But they are not enough to drive a more sustainable repeat purchase and increase in basket size.

For the case of FMCG retailers like convenient stores, supermarkets, health and beauty retailers, there are always price discount marketing from the FMCG brands anyway. And FMCG retailers are most interested in increasing the basket size (Sales Value) and shopping frequency (Sales Volume) with their retail promotion campaigns.

One proven tactics for FMCG retailers in their promotion is to design a collection of incentive gifts that encourage target consumers to shop more and more frequently. For example, I’ve designed marketing campaign for 7-Eleven Hong Kong and 7-Eleven Taiwan leveraging the power of licensing characters like Hello Kitty, Snoopy, Doraemon, Paddington Bear, Winnie the Pooh etc.

By creatively design a campaign theme that are attractive to the target office ladies in the markets, they consumers are fleeting in to shop in 7-Eleven every time we runs a promotion campaign. The campaign not only drive shopping frequency (they shop to collect the incentive collection), it also increase the basket size with carefully calculated campaign mechanism.

Of course there are also a lot of secret ingredient to the successful recipe, and the incentive design and mechanism design for Supermarkets and other type of retail chains will be a little different, but they are all proven to be a very effective and winning principals for FMCG retail promotion campaigns.

Principal 4: Successful Promotion = Positive ROI + Sales Increase

This is another obvious principal that delivering a positive ROI and Sales increase from retail promotion is the only measurement that counts.

With the first 3 principal in place, the last challenge is to play with the numbers and to design a winning redemption mechanism, spend requirements, incentive cost, sales projections and ROI analysis etc. And yes, this is the most difficult part that takes time and a lot of experience to get it right.

Last but not least is the execution of the program on the ground, which directly affects the results of the campaign if the front line staffs are well trained and motivated to deliver the campaign activities.

Inspiration for Brand Marketing

I hope these 4 principals could inspire some thoughts for all marketers, although they are mainly designed for FMCG retailers that basket size and frequency matters.

As consumer goods brand owners, could you leverage these types of retail marketing campaigns to your advantage, and at the same time benefits the retailers? Or could you modify these principal to adapt to your own marketing campaigns?

With the raise of digital and social media technology, the way we do brand marketing and types of incentive are constantly evolving with many new possibilities. And I believe there will be soon some new principals we could consolidate to guide out of box digital marketing campaigns.

Justin Tsui
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Justin Tsui

Top notch performer in both Academic and Commercial world with a profound passion in delivering holistic business innovation and improving humanity and quality of life.Multi-discipline Creative Strategist & Digital Marketer/Entrepreneur. 15+ year experiences across FMCG, consumer electronic, retail and digital industries with proven business success. Worked with renown companies and brands like Procter & Gamble, 7-Eleven, VTech, AT&T, Disney & Sanrio etc. Designed products and brands that touches over 2 billion consumers across Greater China, Asia Pacific, United States and Europe with 1 billion+ units sold.
Justin Tsui
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