EDLP stands for Every Day Low Pricing and involves offering consistently low prices without the need for promotions. BNPL stands for Buy Now Pay Later and it allows customers to purchase products and pay for them in installments, without interest. BOGOF stands for Buy One, Get One Free, this offers customers a free product with the purchase of another product.

While we are cognizant that one cannot survive in today’s world without Price Discounts / Offers. But one needs to both understand how far price discounts REALLY can take you and what alternative strategies you must keep in your kitty. So read on if you wish to discover what really happens when you offer promos.

In most cases, price discounts attract category heavy buyers for whom the need is the category and NOT your brand. It also creates an environment where shoppers become addicted to promo-hunting. And critically, contrary to popular beliefs, Non-Buyers DO NOT start purchasing a brand (or a category) simple because it is on promotion. The reason is a basic Human Behaviour Understanding – they do not buy because they do not have an established RTB (Reason to Buy – there you go, another jargon!). If you do not believe me, ask yourself this question. Suppose you don’t typically buy Peanut Butter (as an example). Would you buy a 500 gm * 2 offer just because the promotion catches your eye? Or would you rather buy a smaller 100 gm pack to first try it out? It costs less and if you like it, you repurchase / if don’t like it then the wastage is less.

One needs to think beyond lower prices being a solution to EVERYTHING. But at the same time remain practical that there needs to be some level of activity here. We recommend that you keep an eye on what is the overall level of promotions in your category and stay below that level. This is CRITICAL if your brand is the category leader! The other option you can opt for is to reduce the depth of promotions. Thirdly, avoid using %s. Say “Buy one get one free” rather than “50% price off” and most shoppers have difficulty calculating %s while on the shop floor. Finally, keep an eye on stocks that aren’t being picked up DESPITE being heavily promoted. These need to be seen with a critical eye at the time of listing and delisting discussions.

But these are ALL short-term tactics. For long-term gains, think of strategies such as De-gramming, Category Adjacency, Seasonal SKUs, Disruptive Planogramming, Being Distinctive Not Different, etc.

We end by quoting Bob McDonald, former P&G CEO, who said, “We know from our history that while promotions may win quarters, innovation wins decades.”!

If you found this interesting, please do reach out to us to see how we can help you drive data driven business growth.