Traditional Promotional Practices Are Not Sustainable for Building Long-Term Customer Loyalty, Says Retail Market Intelligence Firm
DALLAS, March 02, 2021 (GLOBE NEWSWIRE) -- Symphony RetailAI, a leading global provider of integrated AI-powered marketing, merchandising and supply chain solutions for FMCG retailers and manufacturers, today announced the release of “Personalized Promotions: The Key to Bigger Baskets and More Frequent Trips,” in partnership with Retail Systems Research (RSR).
In the paper, RSR revealed that 64% of Retail Winners say that “increased price aggressiveness from competitors” is the top external challenge in winning a greater percentage of consumer wallets. With this in mind, RSR explored the opportunity retailers have to drive profit and loyalty through more customer-centric promotions, breaking away from a routine “race to the bottom” pricing strategy.
“Promotions have always been important. But with blurred shopping channels and changing consumer behaviors, they are more important than ever right now,’” said Brian Kilcourse, Managing Partner, RSR. “In short, it’s no longer about what a retailer wants to sell, but what a consumer wants to buy. The question for retailers is how to put offers in front of consumers at just the right moment and in a way that maximizes the effectiveness of the offer. In this age of cut-throat competition from both traditional retailers and digital ‘pure-plays,’ retailers have come to realize that ‘the right offer’ is much more than just a deal that beats the competition on price. Instead, customer-centricity – indeed, consumer experience and relevance – is key to driving greater retailer loyalty.”
While important, low prices aren’t the only driver of consumer loyalty
Delivering highly relevant, customer-centric offers influences purchase decisions
In the paper, Kilcourse writes, “To maximize the value of the relationship both for the customer and for the retailer, it’s important to not only understand customer buying behavior and preferences, but to be fast and flexible enough to use that knowledge to design and execute the most relevant promotional offers that satisfy and capitalize on consumer needs.” As the paper explores in more depth, AI makes this optimization possible.
AI-powered solutions for promotions bring synergy to CPG-retailer discussions
“A retailer’s objective should not be to sell more products at the lowest price, but rather to keep customers at the center of their promotional strategy,” said Sy Fahimi, SVP Product, Symphony RetailAI. “The RSR Executive Perspectives paper outlines a number of recommendations for retailers related to promotions, from implementing or rethinking loyalty programs, to performing market basket analysis and improving retailer-CPG collaboration. The greatest opportunity, we believe, for retailers to take hold of is the efficiency that AI and machine learning bring to an organization, complementing the still valuable human intelligence of their promotions manager and marketing teams. AI stops the guesswork, forecasting the effect of promotional plans and optimizing promotional spend, so that each investment is made even more efficient. Optimizing retail promotions is paramount coming out of a year like 2020, and helping retailers to do that through AI-enabled solutions is meaningful work for Symphony RetailAI.”
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