LESSON 9: PLANNING PROMOTIONS

Promotions keep your department feeling fresh, encourage new sales and return business, launch new items, and help build your relationship with your supplier community. Planning promotions takes some time, but the return from the time invested is well worth it.

Planning 

• What to promote when? Anticipate what your customers will want at a given time of the year or holiday and plan a promotion for that type of product during that time of year (i.e. Mozzarella during tomato season, Fondue cheeses during winter months, Brie for Mother’s Day).
• Tie into promotions happening in other departments to promote cross-selling.
• Plan simultaneous promotions for different categories of items in your department so that a customer can buy a variety of products in your department that are all on sale.
• Do the math:  
• Look at sales history on a given product, the prior week’s/months and the same period the prior year.
• If you drop the price on that product, how much more do you need to sell to still make the same amount in sales in the same amount of time? Will dropping the price even lower help you sell even more?
• How does the math change if you’re getting a discount from your supplier?
• Plug in the numbers from historical data to find your regular margin (Regular Retail Price – Your Cost * Units Sold = Regular Margin).
• Plug in a forecasted sale price and number of units sold and make sure that the margin result is at least as much as your historical data (Sale price – Your Cost * Units Sold = Sale Margin).
• Forecast volume increases.
• Make sure your volume is going to be high enough for your promotion to be a successful margin driver.
• Make sure your supplier knows you plan to buy more than usual.
• Plan to promote for at least a week, two is better, so that you can invest in the inventory and have time for the promotion to build momentum.
  
  

Signage

• Be sure to make a sign calling attention to the promotion.
• Identify the product.
• Identify the savings.
• Tell the story – let the product sell itself to the customer. Answer questions like: Who makes it? Where does it come from? What’s it made out from? How does it taste? How best to enjoy it? What to enjoy it with?