"Don't do all the hard work yourself." That's perhaps the most valuable philosophy for independents looking to get the most out of in-store promotions.
Visit the competition and spy out new operators, especially the multiples. They spend millions on sussing out how to get the best out of in-store promotions. There's no shame in it go to their stores and copy their ideas!
First impressions, as with most things in life, are vital. A lot rests on a customer's first glance at your in-store offers, making the front-of-house sales bays the most important area for getting the most out of promotions. We use good value £1 lines at front of house, blocked into categories with a maximum of three products per linear metre.
Health and beauty a sector that often doesn't realise its potential in independents is a good category to push in this area and easy to source, offering great volume opportunities and margins. In non-food, a category that accounts for 10% of our profits, £1 deals and seasonal lines should feature heavily. Even on promotion, non-food margins should be set at 30% at least.
Next in line for the promotional push is beers, wines and spirits. Stack beer packs high the higher, the better. I am a firm believer that the higher the stack, the better the customer will perceive the deal to be. When it comes to wine, the way to get shoppers to trade up is to always have a wine you cannot be beaten on.
This is your 'sprat to catch a mackerel' a wine drinker will always trade up, but you have to hook them first. 'Buy six, save 10%' is a good promotional tool but it's essential that deals offer genuine value. Consumers are getting savvy. Jacking up the price just to knock it down again will not cut it. With spirits, a good seller at Christmas but often difficult the rest of the year, we have had some success with linking deals free lime cordial with vodka, mineral water with whisky, and so on.
Sticking with tradition, we recommend that fresh produce is kept near the store entrance. Always have three or four good deals and change these weekly if you can. The rest of the category is about one thing: quality. Never compromise on the quality of produce but always strive to give value for money. Always have a local produce offer on. The local aspect will sell itself but it must be value for money as well.
Chilled and frozen promotions are critical to any successful independent retailer. With chilled, brand loyalty is fickle and price is king.
As a result, high/low promotions prevail, making the chilled sector the most difficult to plan and administrate. Private-label chilled goods must be competitive and offer some sort of permanent multibuy or price-marked strategy, as the Heritage range we stock does. We suggest that at least 25% of chilled space should be given over to promotion.
A separate display freezer for promotional frozen foods will deliver the best uplift of any category if merchandised properly because there's practically no brand loyalty here.
Finally, and most importantly, independents need to work hard on getting promotions right. Word of mouth is still a powerful tool sell 10 existing customers more at good value and they will tell others to follow in their footsteps.
As price is pushed to the front of shoppers' minds, promotions have become more prevalent in our sector. Promotions now account for 40% of our sales. Our promotions are as good as any multiple's but the problem is one of perception. We must all try harder to change this perception and attract more into the sector.
Get the best out of in-store deals
1 Offer £1 or other value deals at front of store; quality is key
2 With beer deals, the higher the stack is, the better shoppers perceive the deal to be
3 Offer one killer wine deal, then persuade shoppers to trade up
4 A separate display freezer will deliver the best category uplift if merchandised properly
Paul Delves is managing director of Harry Tuffins.