Data Driven Automated Approach to Market Promotional Sales

By: Sudhir Vallamkondu, VP, iCrossing

Sudhir Vallamkondu, VP, iCrossing

Stores that have retail locations (Grocery, Home Improvement, Department stores etc.) have recurring promotional sales. These sales are a great way to increase consumer demand, stimulate market demand or improve product availability. They are implemented to attract new customers, to hold present customers, to counteract competition and stimulate immediate sales. Promotional sales account for 10-30 percent of total sales which means shoppers pay attention to promotions. A weekly sale means a flyer comes in start of the week and sale is valid for the week. An example of Walmart weekly sales ad. They also have quarterly or monthly sales cycle. These sales are often in the form of coupons, BOGO, discount or slashed price.

Given the strict duration/strategic advantage of these promotional sales, marketing campaigns have to be quickly created and executed so shoppers can start getting aware of these sales before they expire (think weekly sales) and competition tries to copy the sales. The more customers and how quickly they reach, the more success they have with their sales cycle.

"The ideal approach is to devise an automated solution that does much of the campaign setup/execution and uses retailer first party audience profiles to target personalized ads"

Digitally most store brands focus on "brand advertising". While this is good long-term future purchase shopper consciousness investment, they don't motivate the shopper to take immediate short term action. Promotional sales marketing, which has the potential to stimulate immediate action, is primarily done via direct response marketing by sending weekly print mail flyers (which in my house directly goes to trash) and blanket non-personalized geo targeted ads. An example Fry's food grocery store banner ad for their weekly sale

What’s wrong with this ad?

• A consumer looking at the ad does not know what products are on sale. So the ad is marketing weekly sales event vs the product.
• Because it does not target the product, it cannot be personalized.
• Ad spend cannot be attributed directly to sale lift.

There are a few reasons why these sales are not marketed correctly

• Currently most time is spent on promotional sales planning. There's a lot of math that goes in manufacturer bidding, inventory planning etc.
• There is not enough time to meticulously plan these campaigns (creative, campaign strategy, budgeting etc.) given the short duration of sales cycle. Pre-defined strategies (set of creative, targeting options etc.) are reused.
• Retailers still lag in effectively using their first party data and on boarding their offline profiles to online.

An automated approach also solves some of the other common issues cited¹ by retailer

• Ad versioning
• Coordinating promo messages across media types

Doing it the Right Way

The ideal approach is to devise an automated solution that does much of the campaign setup/execution and uses retailer first party audience profiles to target personalized ads.

Automated Solution for Campaign Setup/Execution

The outcome of promotional sales planning is a feed like document that is usually sent to various vendors (print team, manufacturers, store locations etc). The feed contains fields that has a summary, description, product image, price, locations for each promotional sale.

Format of Typical Feed

Create an automated solution that takes in this feed as input and creates a programmatic campaign.

• Take product image and use programmatic creativesolution to generate dynamic creative cross-platform ads

Image courtesy: Paperg

• Auto map sales items to standard taxonomies (like IAB, Google etc) and target display campaigns based on segments. (For example if Target is selling "Gillete shaving cream" and system can detect that this should be mapped to "Male 25-40" category, then campaigns can be created targeting this age group without needing any manual intervention

• Promotional sales usually reflect local/national events (Cinco De Mayo, Super Bowl etc). Map these events to related taxonomies to target.

• Use locations where sale is valid to specify geo fencing constraints to campaign.

• Use product category to detect sites where ads can be served. For example, all products in baby category can be grouped into one campaign and parenting related publisher sites can be specified as inventory to target.

• Some sales are more attractive than others and these are the ones that get printed in first page of flyer. Campaign budget should reflect this preference so more dollars are spent on persuasive/catchy sales.

• Custom Audience Targeting to Reach New / Existing Customers

Every retailer has some sort of loyalty program that helps tie customer attributes to actual products they bought. These loyalty programs often capture customer identity like a phone number or email address. Create custom audience profiles of all customers that have previously purchased the sales products or any product in that category that will be on sale in next cycle and use Custom Audience targeting to reach them and look alike new customers. Any other attributes collected as part of loyalty registration (age group, shopping preferences, ethnicity etc) can be used to inform other campaign targeting options.

To conclude, promotional sales are great way for retailers to increase foot traffic and marketing them the right way will yield better results.

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