How to Boost Trial and Loyalty With the Right Mix of Promotions

Digital transformation has impacted every aspect of our lives, including how we grocery shop. In the wake of this digital movement, many brands have shifted their promotion strategies to reach shoppers through digital channels. But grocery shopping is a complex and personal thing. The preferences and practices of each shopper are different, and brands must understand the strengths of both digital and traditional methods to reach the most shoppers in the most impactful ways. DIGITAL PROMOTIONS ARE A WIN-WIN When it comes to CPG promotions, digital transformation usually refers to a shift in strategy from traditional “paper” promotions to digital promotions that are “loaded” to a shopper’s loyalty account. These digital promotions emerged a decade ago and have seen rapid growth, as they better meet the needs of brands, retailers and shoppers. With so many benefits, it’s no wonder that digital promotions have grown. According to recent studies by Inmar Intelligence: In 2020, digital promotions took over the top spot as the most redeemed promotion type. In 2021, digital promotions accounted for 33.3% of all coupons redeemed. A TIME AND A PLACE FOR DIFFERENT PROMOTION METHODS While digital has quickly become the cornerstone of most brands’ promotion strategy, there’s a time and a place for other methods. While it should be no surprise that many traditional paper promotions have declined, it’s essential to understand why. Armed with this information, brands can leverage other promotion methods to supplement their digital efforts. FSI PROMOTIONS — DON’T COUNT THEM OUT When brands talk about the “decline of paper promotions,” they’re usually referring to the decline of free-standing insert promotions, or FSIs. Traditional newspaper readership has been declining for decades, and as a result, the distribution and redemption of FSIs delivered by those newspapers are also in decline. However, FSIs aren’t dead and gone. In 2021, FSIs accounted for 24% of all promotions redeemed. So while they may no longer be the predominant redeemer, brands should carefully consider how, when and why to leverage them. OPTIMIZE YOUR REACH WITH MULTIPLE METHODS Beyond FSIs, there are more than 30 “paper” methods. And while many assume all paper promotions are following the same trend as the FSIs, that’s not the case. Why? The decline of FSIs can be attributed to the distribution method, rather than a lack of shopper interest. In 2021, FSI redemption volume declined by roughly 22% versus 2020. However, in aggregate, all other paper methods declined by only 13%. And some paper methods appear to be on the rise with shoppers. This indicates that shoppers aren’t abandoning paper promotions, and it’s all about how and where they find them. Let’s dig a little deeper. In 2021, brands distributed 20% less Electronic Checkout promotions, and redemption volume was proportionately down by 19%. This indicates that shopper interest may not be declining, but there were simply fewer available to redeem. On the other hand, while there were 21% fewer Instant Redeemable promotions distributed (peel-off promotions found on a package), redemption volumes for this method were down only 10%. Perhaps a bit more interesting, there were 12% fewer Direct Mail promotions distributed in 2021, yet shoppers redeemed 2% more than they did in 2020. And this is not the only paper method that saw an increase in redemption volume in 2021. A curious example is the In-Pack Cross Ruff promotion (found inside a package and redeemable on a different product) which saw a 36% increase in redemption, despite only a 17% increase in distribution. What does this data tell us? First, no single promotion method is all-encompassing. Different methods tailor to different retailers, and appeal to different shoppers. SHOPPERS WANT OPTIONS! According to Inmar Intelligence’s 2021 survey of 1,000 grocery shoppers: 70% said that they used digital promotions at least once in the last three months. 61% said they also used paper promotions in that time frame. Nearly 90% expect to continue using a mix of digital and traditional promotions in the future. ONE SIZE DOESN’T FIT ALL If both digital and paper promotions are popular with shoppers, can brands make their jobs easier and pick just one? The answer isn’t so simple. One concern is retailer coverage. While most major grocers in the United States have popular digital promotion programs, some still don’t. In addition, not all shoppers have discovered loyalty-based digital promotions. To support the most retailers and reach as many consumers as possible, brands need to optimize digital promotions and strategically employ additional methods. MIX IT UP THE RIGHT WAY In today’s landscape, it’s more important than ever to understand shoppers, key retail partners, and how promotion methods will best support brand goals and objectives. For help finding the optimal balance across all promotions to maximize your reach and effectiveness, click here.

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