Consistent low prices or regular ‘wow’ deals – what do today’s ultra-savvy retailers and caterers want? Elit Rowland investigates what makes an effective promotional strategy in wholesale.
1. Hit the spot: Find the right prices for products.
The challenge for wholesalers is to ensure that when they run a promotion, they are giving shoppers the ‘real deal’. A good starting point is speaking to customers as well as suppliers about the products and price points that will work.
Londis retailer Bintesh Amin says that the £1 price point works best for his customers. “£2 and £5 are also good,” he adds.
Capturing data on the prices and products that work well on promotion is critical when considering whether your promotional prices are right and where the value of electronic point-of-sale (EPoS) and data-crunching come into play.
John Kinney, retail director of Today’s Group, says, “If a retailer is in a symbol group, that group should be able to support the retailer to understand his pricing and margin by category and help flex his pricing accordingly. That’s where the real benefit of EPoS is – as a business support tool not just a scanning system.”
While the idea of hitting a price point that satisfies suppliers, customers and your own margins can seem impossible, industry experts believe there could be a ‘sweet spot’ that pleases everyone.
“We have undertaken work with some of our clients to analyse the area where volume increases start tapering off after certain price points are hit,” says Mike McGee. “Without looking at this, suppliers can be over-discounting with that extra 10p generating very little extra volume.