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Revolutionize Retail Promotions with Summary on Navigating a Saturated Market by Boston Consulting Group

The article examines how traditional retail promotions have diminished returns in today’s overcrowded marketplace. It discusses the need for more strategic, targeted approaches to stand out.

Boston Consulting Group advocates experimenting with non-traditional retail promotions leveraging data and technologies. Examples provided include personalized deals, social media influencer marketing and experiential POP activations.

Revolutionize Retail Promotions with Summary on Navigating a Saturated Market by Boston Consulting Group

The article makes a compelling case that retailers must evolve beyond generic discounts to build loyalty. Research-backed strategies discussed aim to deliver offers more relevant to individual customers.

While some recommendations lacked depth, overall the article provides a useful framework for rethinking promotional strategy. Retailers would benefit from the guidelines on crafting innovative, integrated programs.

In summary, this article examines why traditional retail promotions now underperform and advocates smarter, personalized alternatives. Call to action: Continue reading to learn strategies discussed such as personalized deals, influencer marketing and experiential activations.


Marketing, retail, strategy, data, technology, trends, leadership, innovation, management, e-commerce, customer experience, promotion, social media


Plenty of retailers send out mass promotions hoping to win new customers and inspire purchases. But according to Boston Consulting Group, your retail promotions may have the opposite effect, overwhelming and alienating the consumers you hope to attract. Learn new research-backed strategies for retail promotions and how to avoid the most common promotion mistakes retailers make. Gain insights into how to make a consistent value proposition to your customer base, while launching retail promotions strategically, with an ethos of continuous improvement.


  • Stop overwhelming consumers with too many mass promotions.
  • Improve your data-driven decision-making by measuring the actual impact of promotions.
  • Avoid common pitfalls when executing promotions, aiming for consistency and simplicity.


Stop overwhelming consumers with too many mass retail promotions.

Between 30% and 40% of retail promotions are either unprofitable or inefficient and risk alienating consumers. Shoppers already feel overwhelmed by an abundance of choice, and sending out too many promotions often overwhelms buyers further. It can be tough for retailers to know which promotions to cut, as many lack the means to gauge the effects of different promotions with any precision. Many retailers are stuck playing the “Uniform Game,” which means they offer uniform prices to their customer base. If this describes your situation, consider leveraging your AI and data collection capabilities to play the “Choice Game,” which entails restructuring your portfolio on a segment-specific basis, reducing the need for blanket promotions. Alternatively, you may want to aim for a more sophisticated approach, playing the “Dynamic Game,” adjusting prices and promotions in real-time.

“By redefining their plans from a consumer-centric standpoint, retailers can identify the consumer behaviors they want to drive, understand how consumers perceive different promotions, and determine why one promotion may be likelier than others to induce the desired behavior.”

Many retailers neglect consumers’ needs when planning promotions, and base their strategies entirely on the previous year’s plan, only making adjustments to match supplier preferences. Avoid this mistake, as it often coincides with excessive promotional spending and results in poor returns on investment. Instead, adopt a customer-centric perspective, focusing on driving specific behaviors and deepening your understanding of how consumers perceive your promotions. Research suggests that customers prefer simplicity when it comes to promotions, so aspire to make easy-to-understand promotions. Connect each promotion to a clear rationale, ensuring it drives incremental consumer behavior change, rather than subsidizing sales that the customer would have made anyway or reinforcing existing behaviors. When you create promotions, personalized offers are the most effective, as buyer behavior can vary greatly between one customer and the next.

Improve your data-driven decision-making by measuring the actual impact of promotions.

Improve your decision-making capabilities by clearly defining your promotional strategy and investing in analytics capabilities that match the complexity of your retail environment. It can be difficult to obtain an accurate reading of your ROI, which accounts for factors such as pull-forward and seasonality, but it’s essential that you work to boost the quality of your data and analytics enough to do so. You should have the capacity to leverage insights from data on your past promotions, while adjusting for factors such as competitor behavior and price changes.

“The worst situation for a retailer is to imagine itself to be data-driven when in fact it relies on low-quality data and analytics.”

Many retailers have adopted promotion software solutions in some form, but fail to transform this effort into value. This is because they’re likely making the following mistakes: They’ve chosen promotion solutions that focus more on administrative tasks, execution and workflow efficiency and less on impact; they’re making inaccurate predictions; they aren’t able to access and review promotional algorithm code, and thus fail to customize these algorithms for their own uses and to ensure that they’re working correctly; and there’s a lack of change management regarding integrating new and traditional approaches to planning promotions, interpreting pre- and post-event analyses, and negotiating with suppliers.

Avoid common pitfalls when executing promotions, aiming for consistency and simplicity.

Retailers tend to make the following mistakes, limiting their promotions’ effectiveness:

  • A lack of consistency – Teams working on promotion, pricing, personalization and markdown shouldn’t work in silos, but rather, need to communicate with one another and align their efforts.
  • Stacking – Consumers prefer to use a single, clear discount, but often encounter multiple discounts, which they must work to combine, or “stack,” to get the full value of your potential discounts.
  • In-store challenges – If promotions aren’t presented clearly in stores, consumers may simply ignore them. Make an effort to make consumers aware of promotions before they arrive at the checkout.

“Rigorously addressing the dimensions of strategy, measurement and execution can help retailers define a consistent value proposition that they can clearly communicate to consumers.”

When you make a consistent value proposition, which you communicate clearly to your customers, you enhance your brand’s reputation, build loyalty and attract new revenue opportunities. Retailers hoping to excel in promotion management should make savings visible to consumers. For example, you could print savings on customers’ receipts or remind them of their accumulated savings over time through in-app messaging. However, unless you systematically address the dimensions of strategy, measurement and execution, you risk running promotions that fail to win customers.

About the Authors

Sebastian Bak, Chris Biggs, Javier Anta Callersten, Robert Xu, Jean-Manuel Izaret, Arnab Sinha, Roelant Kalthof, Vahid Rashidi, Eveline Duyster and Nisha Mallya are professionals with Boston Consulting Group.

Read the full article at Smarter Retailer Promotions for a Saturated Market

Nina Norman is a certified book reviewer and editor with over 10 years of experience in the publishing industry. She has reviewed hundreds of books for reputable magazines and websites, such as The New York Times, The Guardian, and Goodreads. Nina has a master’s degree in comparative literature from Harvard University and a PhD in literary criticism from Oxford University. She is also the author of several acclaimed books on literary theory and analysis, such as The Art of Reading and How to Write a Book Review. Nina lives in London, England with her husband and two children. You can contact her at [email protected] or follow her on Website | Twitter | Facebook

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