Guest comment: Why it’s time to automate promotions management

Guest comment: Why it’s time to automate promotions management

Robin Coles, MD EMEA, XCCommerce looks how automation can enable retailers to create the personalised and responsive, omni-channel promotions needed to engage with an increasingly dispersed customer audience while removing the lengthy, manual fix process that currently characterises promotions.

In the world of promotions, every day can seem like a brand-new day, where so much of what was learned yesterday is lost and everyone has to start the following again from scratch. While this might seem like an odd perspective given that this is not how most people live their lives, consider how promotions are run currently in all areas of retail, be it grocery, DIY, pharmacy or fashion.

A typical promotion is crafted for a single channel, single redemption type and a defined customer set, and therefore has little or no flexibility built in. Making changes can be painful because they require multiple manual workarounds using spreadsheets that date as soon as they are printed. Making changes holds things up so the promotion often does not go to market at the most advantageous time, particularly when a competitor ends up getting there first. And that’s even before considering the higher cost of 1. making changes and 2. seeing the promotion perform below expectations.

In a once predictable world, this was not really a problem, but promotions management and its supporting systems have failed to keep pace with how business is now done. The sheer volume of promotions required; the need to make changes often to keep up with changing market conditions; the ever-expanding range of channels they need to run through to catch the customer; this is what normal looks like, but the almost hand-crafted processes and outdated systems employed simply cannot keep up. And new ideas then become almost impossible to accommodate because the deadline is always imminent in a process where constant readjustment eats away at creativity.

The customer no longer sits comfortably inside a large segment; data now provides insight and insight shows just how personalised and responsive retailers need to be to satisfy their needs and ever more onerous demands. The customer also expects consistency in terms of the offer and its presentation across channels, which the hand-built model simply cannot accommodate.

The same applies in retail sectors such as DIY where different prices are required for each trade partner.

Naturally, there is no shortage of automation in the promotions management business, it’s just that there are usually a plethora of different tools that are dedicated to a single task, often operating on a single channel. Consequently, they do not work together and gaining an overview of progress can only be viewed on the timesheet – time spent by teams but rarely the actual status of the campaign. What is missing is a single management tool dedicated to promotions that understands what can be automated, thus freeing teams to apply their creativity.

A rules-based approach to building and managing promotions enables cross-functional teams to operate knowing that the result will operate across all channels, optimised for each with any overlaps resolved automatically. Errors are eliminated immediately, doing away with the lengthy, manual fix process that characterises promotions currently.

New market conditions can be incorporated instantly, enabling retailers to capitalise on opportunities so that commercial targets are met or exceeded, and much earlier in the cycle.

Promotions can now also be built around the customer, incorporating data on their preferences and responding quickly as those preferences change, as they have dramatically since the beginning of 2020. This data has probably always been available, but it is only now that retailers are starting to apply it dynamically to promotions, enabling them to move away from traditional large segments to more a personalised and responsive approach.

And automation enables promotions to be built much more quickly for the newer channels; research by XCCommerce shows that consumers’ shopping behaviour has changed dramatically in the last five years with the shift to digital channels and accelerated by Covid. 52% are accessing offers via mail coupons while 33% of 24-35-year-olds are accessing promotions via push notifications from an app.

Teams across the business benefit from automation; at the point of sale, processing of offers and coupons is also automated, so that no time is lost by staff trying to work out how to apply them.

Longer term, teams can start to introduce new types of promotion rather than sticking with their old favourites. They can also start to work on areas that are often overlooked because in the past there was never enough time. Slow-moving stock, peak events, new customer segments, new channels, even weather conditions can all be exploited. This then leaves space so they can start to recover lapsed or inactive customers.

The risks involved in exploring new ideas are mitigated because planning is still governed by rules and execution is automated. Moreover, it now becomes easier to justify a more ambitious promotions strategy because automation gives visibility into channel and channel mix performance.

By Robin Coles