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From the Buyers Desk
By An Experienced Retail Professional
Edition 2 — Cross-Category Promotions from a Retail Perspective
What is a Cross Category Promotion?
It is a promotion where vendors, licensors and retailers look to promote products with a common theme aimed at a similar audience. It is a good brand building exercise with the goal of boosting sales across all product categories to the benefit of all participants. Cross-category promotions can be market-wide, open to all retailers or can be retailer-specific.
Steps to Create A Cross Category Event
Step 1: Creation
You need to ensure that your brand or license is strong enough to resonate with the consumer. You must look through the customers eyes to make an objective decision that a cross-category promotion will drive extra sales for all participants; suppliers, licensors and retailers. This is the main driving force for all involved. From a retailer’s perspective, the cross-category promotion must ensure that their retail business receives an improved return on their investment from the retail space and marketing resources dedicated to the event. The selected brands or license can be:
a) New — this is a good way to launch a new widespread brand or license… it creates impact, curiosity and interest in the marketplace!
b) Existing — this is a great way to highlight the brand or license with new and existing products and new categories. We have heard customers make comments such as “i did not know they made this in “xxx” brand or license. My family will love this!”
There must be a wide and diverse product range of the brand or license available with sufficient stock levels in the marketplace at the time of the promotion.
Step 2: Timing
When is the best time to conduct the cross-category promotion? Decisions have to be made as to when to execute a cross-category promotion. Does it tie in with the launch of a new brand or license, such as a movie or TV property? Does it tie in with a particular event such as a sporting event (e.g. FIFA World Cup, Olympics, etc.). Does it tie in with a particular month of year – school holidays, Easter, Halloween, Christmas, etc? Ensure that you take into account the retailer’s priorities at certain times of the year. Retailers will always support Back-to-School (January), Easter (confectionery focus), Summer/Winter fashion launches, Mother’s Day/Father’s Day, Halloween, Black Friday and Christmas (decorations focus).
Step 3: Planning
How much time do all participants need to ensure the cross-category promotion is a success? Suppliers, licensors and retailers all have their own specific timelines for marketing and to procure stock for events. With this in mind, it is better to plan the cross-category promotions as far out as possible. The bigger the promotion with more participants the longer the lead time required to bring all parties together. 12 -18 months would be an ideal timeline for a larger promotion and smaller promotions can be managed within a 4-9 month timeline. To ensure the best outcome, engage the brand and/or license owner to coordinate the cross-category promotion. In many cases they will probably have been involved in these types of promotions previously and will be aware of what is required for success; time lines, engagement required by all parties, marketing, financing, competitions, legal, point-of-sale, etc., as well as the areas that may cause concerns. The brand owners/licensors have the contacts for all the participants who can be used as the focal point for coordination of the event. The brand/license owner needs to liaise with the retailer(s) to establish interest and timelines. Once this is given the green light, each of the participants need to work through what offers/products will bring the best return for themselves and the retailer.
NB* Please think of ways to engage the end customer with your offer – is it unique, it is different from previous offers, is a better price, does it offer better value, is it a new offer, is it exclusive (many retailers like exclusives and giveaways – they brings customers to their stores and they can price accordingly).
Step 4: Execution
Am I ready? The cross-category promotion will have a start date and a delivery date a few weeks prior. Ensure that you have coordinated all aspects with the relevant parties which will include the following:
- The required stocks levels for the beginning of the promotion as well as back up inventory to cover sales over the duration of the event.
- Ensure that all delivery dates can be met to ensure a full stock presence at the beginning of the promotion. Most promotions will do over 50% of the sales in the first 4-7 days. This is when there is peak customer interest in the promotion.
- Marketing is all planned and booked. If retailer tagging is available – please use it. There are a lot of marketing dollars spent on telling the consumer about the products and the promotion. You need to tell the customer where they can participate in the event!
- All competition and or ‘giveaway’ details are agreed and legally signed off by all relevant parties.
- Any in-store point-of-sale/marketing has been agreed to and signed off. Ensure delivery is before the event allowing sufficient time for stores to set up.
- Monitor sales and make the necessary adjustments and liaise with the retailer (e.g. deliver more stock or make a retail price markdown if required). Make sure to remember to act early.
Step 5: Review
What lessons can we learn from running the cross-category promotion?
- Monitor the sales, profit and inventory at the end of the event.
- Did it meet our objectives?
- What did we do right and can build upon this?
- What went wrong… what are the learnings so we do not repeat these?
- Do I need corrective action to clear inventory?
- Plan the next bigger and better sales event.
Over my years in the retail business, many vendors wanted to create or participate in a cross-category promotion and the above writings are just some thought starters to assist in establishing and participating in a cross-category promotion. It’s a guide from a retail perspective and is not meant to be a full and exhaustive way of executing a cross-category promotion and hopefully it can assist in increasing sales.
Thank you for reading!
