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Manufacturers in
the Australian grocery market spend more than four billion
dollars (AUD) on trade promotions each year - more than three
times as much as on above-the-line advertising. A significant
proportion of this is spent on promotional support such as
in-store display and retailer catalogues.
Yet many manufacturers do not have an accurate and complete
measure of what was promoted when, where and how - let alone
a measure of return on promotional investment.
ACNielsen | ScanTrack Causal provides the only measure of
in-store display, retailer catalogues and promotional formats
such as TPR, EDLP, Multi-buy or Bonus offer. When combined
with scan sales and discount, and delivered via easy-to-use
ACNielsen | Advisor reports, ScanTrack Causal turns into a
powerful promotional analysis tool.
How Important are Causal Drivers?
All short-term promotional sales are driven by a combination
of discount, promotional format, display and catalogue. How
important are these variables in driving incremental sales?
Discount is only one tool in the promotional armoury. Good
use of display and catalogue often drive incremental sales
harder than just a discount. And for products on Every Day
Low Price (EDLP), display and catalogue are the only drivers
of promotional sales.
According to ACNielsen research, consumers actively search
for specials in both catalogues and on display in the store.
In fact, catalogues are the single most powerful drivers of
store switching.
Are catalogues thrown out? Not a chance: over 85% of shoppers
keep them. What’s more, they are actively used to decide
where to shop and what to buy. An even larger number of consumers
“look out for displays of products on special”.
In-store display
and catalogues work. According to numerous studies conducted
by ACNielsen’s Advanced Analytics team, a 10 percent
TPR typically yields a 40 percent increase in sales. However,
in-store display can add an incremental 65 percent and catalogue
another 20-25 percent to baseline sales.
In-Store
Display: Visibility and Stock Weight Add to Sales Lift
The three main reasons why in-store displays achieve incremental
sales are:
- They draw attention
- They add significantly to the available stock weight -
which means reduced out-of-stock levels
- Store managers usually ensure they pre-order enough stock
when a product is scheduled to go on display next week.
In-store displays
deliver incremental sales - especially in an EDLP environment
where display and catalogue are the only available drivers
of short-term promotional sales.
Retailer Catalogues Reach 6 Million
Homes Each Week
Retailer catalogues work. That’s why each of the major
retailers distributes a full colour 12-16 page catalogue to
over six million homes every week.
Most of these catalogues are distributed by Salmat, Australia’s
largest direct mail organisation. Each week, Salmat sends
every Woolworths, Coles and BiLo catalogue from each mainland
state to ACNielsen for processing.
ACNielsen identifies
every product at barcode level and enters the catalogue details
into its systems. This includes position in catalogue, the
promotional format used - for example, EDLP or Multi-buy –
and Fly.Buy offers.
Promotional Formats Can Vary
What works for one brand may not work for another. Most promotions
offer a straight discount - but a growing number of products
are now promoted using different formats:
- EDLP: Every Day Low Price, including Rollback. Incremental
lift is achieved by using display and catalogue only - the
price remains constant from week to week.
- Multi-buy: 3 for the price of 2 and BOGOF offers have
become a popular way of giving consumers a discount without
reducing sales value.
- Bonus offer: buy product A, get product B for free. This
can be an effective format of generating trial for the fee
give-away.
None of these promotional
formats are reflected in the price that comes through from
the retailer’s POS Scan data. However, the catalogue
measure in ScanTrack Causal now enables you to identify these
promotional formats through a separate fact.
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