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November 7, 2023
Jessica Fisher

Partner Q+A: Promomash’s Yuval Selik on navigating and executing holiday promotions

Crisp’s partner-in-promotions, Promomash CEO Yuval Selik, demystifies the intricacies of successful holiday promotions, providing brands with a clear roadmap to navigate the season. 

Running successful holiday promotions is all about cutting through the noise. Everyone is selling something, seeking to capitalize on retail’s busy season. And yet shoppers have a very focused set of priorities.

To stand out, brands must fine-tune their messaging to captivate attention during a time when consumers are preoccupied with family, friends, and festivities – while being bombarded with discounts left and right… and at a time when the retailer is also busier than ever. Brands need to find a way to resonate with and take advantage of the seasonality.

Take, for instance, a kombucha brand. You can’t sell kombucha in December the same way you sell it in June, especially to consumers who are seeking wine or cider. The messaging – and the promotions that serve to boost the messaging – need to be different. 

Another classic strategy is for brands to unveil special product offerings; SKUs tailored to the festive mood in different bundle packs, or featuring seasonal flavor profiles like pumpkin or peppermint. Still, the messaging for these will need to be thoughtful and distinctive. 

Brands need to differentiate themselves by considering the following:

  • Know themselves. Why was the company founded? Why did they put so much on the line to take their product to market? Always keep this in mind.
  • Understand their product. What problem does the product solve? What unique problem does it solve, seasonally? Take Band-Aids for example, which serve to stop bleeding. They can also be used for protection, to ward off blisters during a Summer hike.
  • Understand their customer base. Not everyone is a potential customer. Moreover, in retail, a brand’s customer may not even be the end user (we’ll get to this in a minute). Brands should focus on specific customer segments and tailor their messaging accordingly.
  • Adapt their messaging strategy seasonally. During the festive season, consumer priorities change. Adjust brand messaging to match the values and sentiments they hold dear.

What kinds of CPG promotions should a brand choose during the holidays?

There are five core promotions that exist in retail. They are:

  • Price discounts
  • Advertising
  • Off-shelf displays (e.g., end-caps, shippers)
  • Coupons, which are tactical price discounts
  • Demos and sampling

There are some things to keep in mind when deciding which promotion to execute.

First, price isn’t everything. When you walk down the aisles of any supermarket, you would think that a price promotion would attract you to a product. This would be true if there were three price cuts on the shelf. When there are a hundred price-cut stickers on the shelf, the price doesn’t matter that much.

If you promote too aggressively, you may also train shoppers to only buy your products during promotional periods. For this reason, price cuts shouldn’t fully define a holiday promotional strategy.

Bundling offers, showcased either through retailer advertising or collaborative off-shelf displays, can prove effective during the holidays. Pairing your products with non-competing, complementary items helps them stand out among others. Think along the lines of wine with cheese, or cookies with milk during the festive season.

Holiday promotions are costly. How should brands think about the value they’re getting in return?

The key is understanding who the primary customer is for a brand. It’s the retailer, not the person shopping from the shelf. Retailers like Whole Foods, Kroger, and Albertsons are the brands’ main clients. These retailers face high costs from renting space, shipping, and staffing, so their normal profit margins from selling goods are thin. To enable brands to promote and sell below their normal price point, they charge brands for trade spend, which covers the discount along with any additional costs of promoting.

Retailers carefully curate their product assortment, aiming to both attract shoppers and sculpt their store’s brand image. For brands, this means it’s crucial to resonate with retailers to secure optimal shelf space. Effective promotional strategies, especially during pivotal periods like the holiday season, are one way to achieve this.

Let’s go back to the kombucha example. For the holidays, they might spotlight a seasonal punch recipe and offer a promotional discount. Not only can this drive immediate holiday sales, but successful promotions like these can also bolster a brand’s standing with retailers, laying the foundation for continued success throughout the year.

What should brands know about managing trade spend (and deductions) during the holiday season?

Along with the peak sales season for many brands, the holidays show a noted rise in deductions. The deviations from the usual product assortments, whether it’s a change in price, seasonal SKU, shipping alterations, or product modifications, frequently result in a surge of invalid deductions.

It’s essential for brands to have a deep understanding of every single deduction charge code that arises. Generalizing deductions as a mere “cost of doing business” is a flawed approach. A comprehensive understanding of each deduction ensures brands are aware of what’s really going on in the retail trenches – especially during the holiday season, to successfully harvest sales profits.

How does Promomash help brands ensure successful holiday promotions?

The key to effective promotions is understanding the metrics of success, which boils down to one key component: data. The most invaluable data in this respect is real-time sales data, giving brands insights down to the individual store level. 

This is where our partnership with Crisp is so powerful. We integrate retail data from Crisp into our platform, allowing for comparative analysis on multiple levels: store-by-store, product-by-product, and even ambassador-by-ambassador. 

These granular insights provide brands with a pulse on how their demos or promotions are influencing sales and long-term profitability. Furthermore, Promomash pairs retail sales data from Crisp with a brand’s P&L on a period-by-period basis. This P&L view gives brands a comprehensive understanding of how promotions are tied in with profitability, growth, gross revenue expenses, cost of goods, and more.

With the festive season being a high-stakes period for sales, having such granular insights helps brands tailor their promotions to resonate more effectively with holiday shoppers – in real-time with Promomash and Crisp.

Great! Anything else, Yuval?

Yes! I have a framework for all brands to remember: CPGenius.

As we say, Crisp + Promomash = Genius, or CPGenius.

However, CPGenius also symbolizes the three essential dimensions vital for a brand’s success: Cash Flow, Profitability, and Growth (CPG).

Using our integrated platforms, brands gain the insight needed to effectively balance these three dimensions. For example, growth must be tempered by ensuring sufficient cash flow and profitability. 

Balancing this equation is particularly vital during the bustling holiday season. As we approach this period, we’re excited to offer our unified solution to customers and thankful for the ongoing collaboration.

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