I was one of the fortunate people in the standing-room-only audience for the NRF panel in January on “How to Break the ‘Death by Discount’ Cycle.” The Group Vice President of Merchandising for Sally Beauty, Linda Voracek, joined Revionics SVP of Product Strategy, Cheryl Sullivan, on a panel moderated by RSR’s Brian Kilcourse to talk about this timely topic.
Brian cited recent RSR Research survey results showing that 47% of retailers are experiencing increased price transparency and 37% report increasing competitor promotional intensity. The urge to get more and more aggressive on promotions – and destroy your margins and profitability in the process – is all too real.
Fortunately innovative retailers like Sally Beauty have found a way forward. Retailers across the room perked up as Linda described how focusing on value, not just price, and using predictive analytics to know exactly what impact a given promotion will have on demand for which items lets you both build stronger customer loyalty and ensure long-term business health. Retailers have an unprecedented wealth of customer data available to them, and using intelligent promotion optimization tools can drive surprisingly rapid ROI – and free up much-needed extra funds to strategically invest in other areas of your business.
How to Break Bad Promotional Cycle
We caught Linda and Brian after the panel to recap highlights and discuss how retailers can escape “this promotion madness,” as Brian so aptly calls it. In that discussion, Brian also noted that RSR’s survey revealed that over-performer retailers put as much or more emphasis on their data v. experience in making business decisions whereas retail underperformers placed much more emphasis on experience over data. Linda remarked that there is so much data available to retailers today that it can seem overwhelming, but she and Brian agree that modern data analytics architectures deliver amazing results.
I invite you to spend five minutes and view this brief video to hear for yourself key lessons from a retail innovator who is leading her organization in breaking the “death by discount” cycle.