Promotions will be the key to driving CPG sales this holiday season

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Promotions will be the key to driving CPG sales this holiday season

By John Gibson - 08/27/2020

This holiday season will be challenging for CPG manufacturers as pandemic-induced uncertainty is making it difficult for brands to confidently plan seasonal marketing activities.

That said, the widely-held notion that holiday shopper behavior will be radically different than in past years is, in light of data from the Inmar Intelligence 2020 Shopper Insights Survey, a serious overstatement. And one that marketers must look beyond to find seasonal sales success.

Engagement opportunities are coming with the season
Inmar-collected data finds that while some shoppers are changing their holiday plans, the majority of consumers surveyed are looking to shop and celebrate much as they have previously. That includes making promotions a central part of their purchase behavior.

From planning and spending to gathering and celebrating, shoppers are looking to regain a sense of normalcy during their holiday season. Sixty-five percent of shoppers who have already set their holiday budgets are planning to spend the same, or more, as they did last year. At the same time, 55% of shoppers say that previously planned in-person holiday events are still on their schedules.

Things may change as the holidays get closer but, based on current data, cautious optimism is not unwarranted and CPG brands must be proactive in their marketing and aggressive in their use of promotions if they’re going to maximize sales in the months ahead.

So how can brands best leverage promotions during the holiday season to drive topline revenue and deliver greater value to shoppers? A situational analysis points to some specific strategies that hold the promise to do both.

Season-specific strategies will increase promotion ROI
The holidays present brands with an opportunity to increase typically higher seasonal consumption while also encouraging year-round presence in the household pantry. With shoppers already planning to have their products on hand during the holidays, brands should use offers that incentivize them to trade up to larger sizes or make multiple-package purchases. Increasing the amount of product in the home can generate greater and prolonged consumption.  

With competition within categories even more intense during the holiday season, strategic use of high-value or product loading offers that match against competitors’ most popular sizes can grow a brand’s share within the category. Running “multiples,” such as “buy three, get two,” can lock shoppers into a brand for the duration of the holiday season and block out the competition.

While many shoppers will be seeking out their seasonal favorites during the holidays, these festive times can also be used by brands to drive new product trial. CPGs looking to activate new purchasers will be well served by issuing high-value offers on their smallest package sizes as a way to drive initial volume, get their products into the house and cultivate future, repeat purchasers.

Despite this holiday season being unique in any number of ways, brands that are both strategic and efficient in their use of promotions will enjoy a traditionally successful holiday season.

Promotion positioning will be critical
Inmar’s shopper research finds that shoppers are looking forward to the holidays as a chance to escape the pandemic and they’re willing to spend what they need to in order to “get away.” But, at the same time, they will be actively looking for help in affording their seasonal celebrations.

A hefty 81% of shoppers surveyed said they plan to look for deals or special events prior to making their holiday purchases. Therefore, it’s essential that brands optimize their media mix to ensure shoppers find their offers and can easily acquire them via their preferred channels.

While analysis of H1 2020 coupon redemption shows digital promotions continuing to grow in popularity with shoppers, paper coupons and trade-funded offers are still very much in use by consumers facing increasing economic pressures. Employing all of these pre-shop promotion methods will help brands find a place on consumers’ shopping lists and, with 61% of shoppers reporting they “usually” or “always” make a list when shopping in-store for grocery products, brands need to be on those lists!

Issuing high-value offers (with appropriate purchase requirements) while fully leveraging retailers’ media networks and their in-store media capabilities, both digital and traditional, to advertise offers will help brands get on those lists. Being part of a promoted recipe will also help as 40% of shoppers plan to seek out meal ideas and recipes as part of their holiday preparation and shopping.

‘Tis the season for action
No one can know with certainty what the holidays hold for shoppers or brands. However, shoppers’ collective wants for a respite from the protracted crisis and their need for assistance in stretching budgets are combining to create a significant seasonal sales opportunity for those CPGs that effectively deploy and distribute intelligent, attractive promotions.

Despite this holiday season being unique in any number of ways, brands that are both strategic and efficient in their use of promotions will enjoy a traditionally successful holiday season.

John Gibson is a board advisor for Inmar Intelligence.


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