For sporting fans, the summer of 2016 truly is a glorious time, from annual events such as Wimbledon, the rugby union summer series, Tour de France and cricket one-day events through to the Olympics and UEFA Euro championships. Marcus Ardeman of Eurostop explains how to make the most of these opportunities.
Major sporting events make an impact on the lives and pulse rates of sporting fans, so how can retailers capitalise on the feel good factor? There are plenty of ways to get involved with events without the eye watering cost of directly sponsoring the event itself. To maximise opportunity and increase sales retailers should consider a program of promotions that amplify the excitement and passion that major events stir in almost all of us.
The power of promotions
The purpose of promotions is to increase sales, attract new customers, and retain current customers. While most business owners would love to sell products at full price all of the time, sales promotions have proven effective at increasing the overall bottom line.
Promotions differ from discounts in that they are less of a blunt tool and are psychologically more attractive to consumers. A discount of 10% off an item for a set period of time is only really appealing to a consumer if they were about to buy the item anyway. It brings forward in time the purchase date but it doesn’t ensure that the consumer spends the money saved within the store.
If I am about to purchase a jacket for £100 and on the day I save 10%, I may decide to use the £10 saved on buying lunch in the café down the road. No additional value to the store and furthermore, we know people love to tell a friend about a good deal but at 10% it doesn’t feel like much of a bargain to talk about!
We all love getting a great deal so what are the more popular options that retailers could consider when planning their promotions and how can they tie them in with a sporting theme?
Planning (buying stock specifically for promotions).
Many retailers look at promotions just as a way of selling slow moving stock, however often a well-planned promotion can also assist in bringing in revenue at quieter times. When planning/buying, a retailer can look at products which might be outside of their normal product set, but will be purchased to be used as part of a promotion to increase revenue at these times.
This is when retailers reduce prices on a wide range of products in their store for all customers. By having a theme running across the range retailers can align the products with a sporting event for example a summer picnic theme during Wimbledon with a promotional offer on 5 items (e.g. racket, balls, sweat bands, t‑shirt, shorts) for a fixed price. Through having good data on what is selling well, retailers can target the less successful product lines and bundle into the promotion. If customers feel they are getting a great deal they may take a punt on something new that soon becomes a firm favourite.
When retailers know that certain products are in demand, regardless of whether it’s a luxury item or everyday need, they can provide certain products at a discount to draw new customers to their store. Known as loss leaders, these products are great for selling overstocked items, increasing traffic to the store, and generating brand awareness.
However, sales data is key when planning a loss leader promotion so as not to harm your margins. This is where coupling a loss leader promotion with a till coupon offer for a next visit can work well. For example a coupon can be produced that will only be activated at the end of the UEFA European championships, for a limited time.
Bundling products is a brilliant way to generate a higher perceived value for a lower cost that customers have a hard time staying away from (I speak from experience!). Whether it’s a “buy one, get one free” deal or a “3 for the price of 2” special or “4 items of clothing for £50”, this tactic is great for making customers feel that they’re getting more for what they’re paying. As a bonus, this is a huge draw to then entice those customers to buy higher priced items once they’re in store.
Clothing retailers could use bundle pricing to great effect showcasing suggested outfits for sporting events such as Ascot racing, Henley regatta, Wimbledon etc. Again, this is where sales data is absolutely vital in helping retailers to select the product lines that are popular sellers and aligning with less popular items to bump sales.
Data is key
Whilst promotions encourage people to spend whilst in store, they don’t necessarily encourage repeat visits. This is where it is essential for retailers to understand their target customers buying habits if they want to increase profits.
Data is absolutely vital and this is where a good electronic point of sale system (EPoS) can help retailers take their promotions to the next level. By delivering comprehensive sales reporting, retailers can decide which products to target and for how long. Additionally, with access to real-time sales data, retailers will be able to monitor the performance of the promotion and more importantly make any modifications in light of changes in business requirement.
Additionally, a good EPoS solution can enable retailers to be creative with their promotions, supporting a wide range of options, and build customer loyalty by producing promotional coupons printed at the till for use with the next visit or purchase.
Just like in sport, post match analysis is key to understanding success. Promotions fundamentally work by earning revenue in exchange for a smaller investment so it is important to calculate the return on your investment.
Again, this is where a good EPoS solution with comprehensive reporting becomes a valuable tool. An EPoS system that provides mobile access and real time information also means that managers can monitor how well promotions are going and modify if needed. In addition to understanding profits achieved from the promotion, retailers should be looking at sales volumes, customer satisfaction and if the goals of the promotion were achieved.
Well-crafted promotions make the purchase process more engaging and rewarding and can encourage the customer to take the next step towards making a purchase. By tying the promotion in with the feel good factor that large scale sporting events generate, retailers can inject fun into the process.
Through understanding the target audience, the channels they use and the promotions that appeal, retailers can turn their business into a brand that customers love and more importantly, a place they regularly purchase from.