One reason for this is a lack of clear insight into which promotions are working - and why. The Boston Consulting Group's research indicates that 20 percent to 50 percent of promotions generate no noticeable lift in sales - or, worse, have a negative impact. Another 20 percent to 30 percent dilute margins in that they don't generate an increase in sales sufficient to offset promotion costs.
To help retail companies run fewer, more effective promotions, there is a four-part approach to improving promotion planning, evaluation and execution. By adopting these practices, companies can increase the margin on promotions by 2 to 5 percentage points and position themselves to win in an increasingly challenging retail environment.
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