Solutions
Price and Promotional Strategy
The situation becomes complex where multiple channels are used as prices and promotions need to be managed across every channel.
Price changes and promotions need to be scheduled and potential conflicting promotions identified. Care must be taken to ensure products that have been discounted are not inadvertently included in other promotions. Voucher codes must be expired to prevent them being shared on the Internet and used long after the offer should have ended. Without clear management such double discounts and expired voucher codes can seriously erode margins and potentially lead to loss making sales.
Nonetheless, to satisfy customer expectations compelling offers are a necessity and retailers need to ensure they can cope with this more complex environment. When looking to automate price and promotions management there are three key elements that need to be considered.
First, ensure a broad and extensible range of promotion types are available covering products, categories and baskets. These not only need to cover simple promotions such as markdowns, percentage off, ‘buy one get one free' etc. but also needs to support discounts on category or basket spend plus potentially complex ‘link save' deals. If a loyalty scheme exists, the awarding of points, including double or triple awards, needs to be integrated with the promotions management system.
Voucher codes or coupons need particularly close attention. When creating them consideration must be given to whether they can be used by anyone, a set of customers or an individual customer. Defining that they can only be used once or a set number of times and expire after a given date avoids ‘old' codes and coupons being used repeatedly.
Second, ensure there is a strong management framework around defining and scheduling promotions. This not only needs to include support for a clear promotions approvals process but should also include rules to check the validation of all promotions - thereby avoiding the unwitting application of double discounts. Where multiple channels are supported, management tools must allow price and promotions to be set to apply across all channels or individual ones.
To track budget, a price and promotions management system should allow discounts offered to be allocated to specific cost centres or third party suppliers and report charges as appropriate. Through these steps margin can be managed accurately and the success of specific promotion monitored effectively - improving the ability to undertake future promotion planning.
Finally, ensure that all promotions can be applied correctly at checkout time and clear information is offered to customers on the level of discount awarded. This must include the tracking of expired promotions to ensure that customer returns are refunded correctly and full price refunds are not given for discounted goods even if they were part of a potentially complex ‘link save' or basket promotion.
By adopting these steps and implementing improved price and promotions management retailers can offer customers the compelling offers they are seeking, thereby retaining customer loyalty whilst at the same time ensuring margin is being retained.