This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
Retailers suffering from promotion fatigue
Retailers are tired of promotions, according to a survey commissioned by Aldata Solution, a global leader in the supply of business solutions to retailers.
The survey found that after two years of focusing on promotions, 46% of retailers surveyed plan to shift their attention to gaining a full view of their customers’ buying patterns both in-store and online.
“The ongoing economic situation has altered the way the retail industry operates and forced a change in tactics in the fight for customer spend,” said Allan Davies, chief marketing officer of Aldata.
“In the next three years, ‘promotion fatigue’ will give way to more focus on a better understanding of consumer buying behaviour and getting a full view of what, how, and where customers are buying,” Davies added.
The survey appears to tally with wine retailers, who are changing their tactics in terms of their approach to discounting.
“Consumers are starting to see through bogus promotions”, Rowan Gormley, founder of Naked Wines told the drinks business.
“Retailers should be going back to their job of being curators for their customers, seeking out quality at every level by sifting through the crud and unearthing the gems rather than relying on promotions,” Gormley added.
“We’ve moved away from the heavy promotional angle we adopted three years ago, where we were offering 50% off some bottles.
"Promotions are often disingenuous and give off a dishonest message. Strong retailers never trade off discounts, as it cheapens your brand to do so,” Joe Gilmour of Roberson told db.
Meanwhile, global wine director for Direct Wines Justin Howard-Sneyd told db: “We’ve not relied heavily on promotions the way some other retailers have.
"It’s important for companies to maintain their integrity, and going down the route of heavy promotions is a slippery slope that’s hard to come back from.”
Lucy Shaw, 18.04.2011
It is easy for wine retailers to agree with the sentiments of this piece. Very few retailers in the UK are making sufficient margin. But it will be interesting to see how many really embrace the implications of a promotion-free environment (if they do at all). A lot of lip service is paid to a more ‘customer friendly’ approach to wine retailing but a glance at some leading websites shows many retailers still stuck with some pretty customer unfriendly policies. Almost all still require customers to purchase minimum quantities of wines (the single biggest impediment to online wine shopping), almost none have loyalty point schemes and not many offer next day delivery. Worst of all, almost all still force customers to choose from an extremely narrow range of products. These policies are pretty much the reverse of successful online policies in other areas of the retail sector – where ease of ordering and broad product range are accepted as an absolutely necessity. It seems that many people in our sector still believe in the old ‘wine is different’ cliche and that consumers will put up with what is good for the retailer because there is no alternative. But alternative models like Slurp (1,500 different products availble by the single bottle for next day delivery) are starting to emerge and now for the first time we will be able to see just how different wine really is from the rest of retail sector. Interesting times ahead …