BOGO, percent-off, sale price, free gift with purchase…for shoppers, all of these claims signify savings ahead. But on the other side of the equation, trade promotions like these require significant investment, often representing the second largest line-item in a manufacturer’s P&L. In today’s economic climate—marked by tariffs, inflation, shifting consumer spending habits, and ongoing supply chain pressures—promotions are more than just a tactic to drive sales; they’re a strategic necessity.
With the promotional landscape evolving rapidly and digital offers surging, the question remains: are your promotions truly working? Are they driving incremental sales, or simply subsidizing purchases that would have happened anyway? As the cost of promotions rises, so does the need for smarter, data-driven strategies. In this article, we’ll break down the latest promotional trends, explore how consumer behavior is shaping promotional effectiveness, and highlight ways to optimize your promotional investments for maximum impact.
The Current State of Trade Promotions
The promotional landscape is getting noisier, with the overall volume of promotions doubling in recent years. While weekly ads have remained consistent, the use of digital ads has exploded. This digital growth has been driven both by digital coupons, up 40% in the past two years and by digital temporary price reductions (TPRS), up 60%.
Why are digital promotions growing so fast?
Digital promotions have skyrocketed for a variety of reasons. Continued growth of ecommerce and BOPIS, competitive pressures like real-time price tracking, and a general consumer preference for digital are all driving forces behind digital promotions growth. We also see a new path to purchase that starts online, and a rise in retailer loyalty programs that drive increased digital engagement. While consumers love digital promotions for their ease of use, retailers and manufacturers also benefit from digital through reduced printing and distribution cost, in addition to the ability to personalize coupons based on buying behavior.
Are physical promotions and weekly ads still important?
The weekly ad is still the cornerstone of a retailer’s promotional strategy, and remains a go-to vehicle for consumers. Inclusion in the weekly ad signals broad-scale support and improves visibility of specific promotions, helping brands reach new audiences. For shoppers short on time or mental bandwidth, the weekly ad can also offer a more concise view into the best offers available at any given time, saving them from sifting through a seemingly endless list of other offers.
Promoting Amid Economic Uncertainty
In times of rising prices or economic uncertainty, consumers become increasingly reliant on promotions to save money. When budgets are tight, shoppers put more effort into seeking out savings, browsing retailer ads or even forgoing purchases when there’s no promotion available. Especially in times of economic uncertainty, it’s important to invest in promotions to protect your business as well as strategies that potentially grow your business.
What’s the best promotional strategy during an economic downturn?
If nothing else, your promotional strategy in times of economic uncertainty should focus on maintaining your loyal shoppers. Remember, even if you’re their preferred brand or retailer, shoppers will not remain loyal if they can’t afford to—45% are likely to switch brands for a better deal and 38% will switch retailers. Stay on top of category trends to ensure you’re priced competitively, and work to better understand your price-conscious customers through deeper demographic and psychographic profiling.
How will tariffs impact promotional behaviors?
Recent U.S. tariff policy is likely to drive shoppers to increase deal seeking behaviors. Today’s consumers are uneasy about the impact of tariffs, with many fearing price hikes on goods & services as a result. Three-fourths of shoppers (76%) anticipate making changes to their finances or shopping behaviors in response to or in preparation for new tariffs, and the most popular reaction is looking for sales or coupons to offset price increases (41%).
Adding Consumer Context to Promotional Tracking
Supplementing promotional tracking with consumer purchase data allows for a deeper understanding of promotional effectiveness. Promotions are not one-size-fits-all. Different promotional attributes resonate with different types of shoppers and inspire different buying behaviors. It’s essential to identify which promotions are driving incrementality in order to optimize return on investment.
When measuring promotional effectiveness, it’s important to not only understand lift, but also where that lift is coming from. Did your promotion bring new shoppers into your brand, category or retailer, or did it subsidize purchases that would’ve occurred anyways? Layering in panel data allows you to isolate net new buyers, and also to track whether on-promo buyers repeated their purchases after the promo period ended. Without this added consumer context, marketers may draw mistaken conclusions from their promotional analyses.
What types of promotions resonate most with shoppers?
Promotional preferences vary significantly across consumer groups and categories. For example, past Numerator research has indicated that younger shoppers tend to favor sale price and “save $X” promotions, while older shoppers prefer BOGOs or “with purchase” offers. This is because younger shoppers generally have smaller households with less need or space for bulk quantities, and because “save offers” are easier to apply digitally. Diving into these types of insights for your specific brand or category’s shoppers can be even more insightful, though, as no two categories or consumer groups function exactly the same.
How do consumer surveys fit into a strong promotional strategy?
The deepest understanding of consumer behavior often comes directly from consumers themselves, making survey research a key tenant of a strong promotional strategy. When surveying shoppers, you want to ensure you’re talking to real consumers that have purchased your brand or category, as well as differentiating those who bought the product on promotion. Surveying verified on-promo brand buyers ensures you’re speaking to the right audience, and allows you to ask questions such as:
- Did you actively seek out any type of promotion for [brand] before purchasing?
- Did you see this promotion before you bought your product?
- Where do you typically find promotions for [category]?
- How appealing do you find the images and visuals associated with this promotion?
- What factors are most important to you when shopping in this category?
Promotional Trends to Watch
Sponsored Content & Retail Media Networks
Retailers are no longer just sales channels—they’re becoming media platforms, making sponsored content and retail media networks an interesting trend to watch. Manufacturers have an opportunity to invest in new capabilities like featured promotion placements, but they need to figure out the right mix to drive the best outcomes for both the retailer and the brand.
Retailer Sales Events & Retailer Loyalty Programs
We’ve seen an increase in new and relaunched retailer loyalty programs in recent years. These programs now go beyond simple point systems, offering personalized discounts, early access to promotions, and exclusive deals. Retailers must differentiate their programs by giving consumers more value to deepen engagement and drive loyalty. For manufacturers, these programs present a growing opportunity to strengthen their presence during key retail moments. By understanding their promotional effectiveness, manufacturers can make more strategic investments that maximize impact and return.
Delivery Services
The growth of digital promotions now extends beyond retailers to include third-party platforms like Instacart, Gopuff, and DoorDash. As more shoppers buy groceries through these services, promotions increasingly influence not only what they purchase, but where they shop. These platforms often feature different promotions than traditional retailers, adding complexity to the landscape. To truly measure promotional effectiveness, brands need visibility across all consumer touchpoints.
Make the Most of Your Promotional Spending
Numerator’s industry-leading Promotions Intel and Promo Insights are designed to help brands and retailers build effective promotional strategies. Backed by 30+ years of promotions tracking and market leadership, these solutions give you access to total market activity across all media types and link this activity to consumer purchase behavior. For more information, reach out to your Numerator representative today.
