BCG has worked with leading retailers to help them measurably improve promotion performance.
Promotions are one of the most important tools a retailer can use to improve performance, and they often make up 10-45% of sales. Yet BCG has found that such performance is highly variable. Based on our research, as many as half of all promotions generate no discernible lift on sales. (Worse, many retailers can’t accurately gauge the performance of promotions, or predict their performance in advance.) By employing data analytics—and understanding their consumers—retailers can markedly improve their promotion performance.
Promotion plans typically fail for several reasons:
Overcoming all of these challenges requires a focused strategy. BCG collaborates with our clients to embed new insights and build up internal capabilities at our clients' organizations, based on four essential pillars:
Improving promotion performance is a crucial and sometimes complex task. BCG has delivered significant long-term value to retailers by helping them build the capabilities required to deliver effective promotional plans.