Indiscriminate Promotional Offerings Sacrifice Retailer Profits, Customer Satisfaction, and Business Results

Indiscriminate Promotional Offerings Sacrifice Retailer Profits, Customer Satisfaction, and Business Results
June 11, 2018 Tevia Arnold - Senior Director, Global Marketing

When a recent Revionics-commissioned study conducted by Forrester Consulting unearthed surprising disconnects in retail promotions, including the fact that 52% of the weekly or monthly retail promotions go to customers who would happily have paid full price, Revionics decided to probe more deeply into the emotional psyche of the shopper to learn exactly what types of retail promotions are meaningful and impactful – and which are leaving shoppers annoyed and less likely to shop at a retailer i. The resulting research, also conducted by Forrester Consulting on behalf of Revionics ii, draws a stark conclusion evidenced in its title: “Indiscriminate promotions cost retailers.”

Despite having extensive data on historical promotions and shopper preferences, retailers who neglect to perform effective promotion performance analysis default to easy but unproductive offers that have unintended negative effects. For example, 37% of respondents who received offers on items they would have paid full price for said the offer had neutral or negative impact, with more than half of those saying they would be less likely to shop that store or brand in the future or that they reacted with annoyance.

“It is interesting that many of these unproductive offers come via email, a medium which retailers may find easy or inexpensive to use especially when delivering personalized offers, but which still carries risk if used indiscriminately,” said Cheryl Sullivan, Revionics’ chief marketing and strategy officer. “We clearly see in the study results that unfocused offers fail to elevate a brand, and can even be damaging.”

In addition to considerations of an offer’s channel, the research revealed important item category nuances. As the research notes, “Shoppers prefer promotional offers synchronized with the frequency of their purchase. More frequently purchased items – such as groceries, household essentials, personal care products, and convenience products – are the most likely to benefit from daily or weekly offers.”

When determining the right promotional offer, retailers should tread cautiously. Although 65% of shoppers appreciated personalized prices, 47% of those shoppers also stated they would be angry if someone else received a better price.

Today’s tech-savvy shoppers believe retailers should utilize technology and data analytics to provide targeted, relevant pricing and offers. In fact, 59% of shoppers reported that they would refuse to purchase an item if they perceived the price as arbitrary. And consistent with findings from earlier studies, they accept price increases or decreases that remain within the “fair” range if they are based on data science – that is, driven logically and not arbitrarily.

In Conclusion

“Retailers who leverage machine-learning based price and promotion capabilities have a clear advantage in delighting their customers with meaningful, carefully crafted prices and promotions,” Sullivan said. “Conversely, retailers who fail to utilize these capabilities risk alienating shoppers, squandering scarce resources and undermining their brand – costly mis-steps that can prove fatal in an increasingly unforgiving retail landscape.”

Learn more

For more in depth insight into this research, view our webinar, Stop the Insanity: Global Shopper Study Offers new insights on how to improve promotions, personalization and pricing.

To learn more about Revionics solutions or to request a complimentary copy of the research please contact


i Understanding Retail Customers’ Pricing Expectations and Tolerances, a Revionics-commissioned study conducted by Forrester Consulting, May 2017.
ii Indiscriminate Promotions Cost Retailers, a Revionics-commissioned study conducted by Forrester Consulting, May 2018.