Retail & Distribution

Top 4 Promotion Challenges — and How to Solve Them

31 July 2018

3 min

Promotions are vital to retailers — 84% of shoppers say that promotions are an important part of their buying decision [1]. Promotions can increase brand loyalty, accelerate buying decisions, attract new customers, move excess inventory, and increase the average value of sales transactions. Despite their popularity (virtually every retailer offers promotions of some type) retailers often struggle to configure, execute, monitor and measure them across multiple channels, and a whopping 70% of promotions don’t break even [2] ! What are the specific challenges retailers face surrounding promotions? Here we’ve assembled the top four we hear from our own retail industry clients.


1. Combining multiple (and complex) promotions in a single transaction

Retailers are smart to offer a variety of creative promotions to attract new customers and bring back loyal customers — and some of those promotions can be complex, such as combining items from different product lines into a package with special pricing. What happens when a customer wants to take advantage of more than one available discount, or combine a promotion with a loyalty redemption? Many point of sale applications cannot support the accurate real-time calculation of complex promotions, and many more do not support the ability to combine multiple promotions in a single transaction. The result is a disgruntled customer, a frustrated employee, and a potential lost sale.


2. Executing promotions across multiple channels (web, stores, outlets)

Retailers often rely on multiple point of sale systems to manage their various channels, with one system for their ecommerce channel, another for their stores, and perhaps a third to support outlet sales. If the retailer wants to offer the same promotion across multiple channels, staff needs to re-enter the data in each point of sale system. It is time consuming and inefficient. Or if the retailer is running a single POS across its channels, but wants to offer different promotions to different channels, and the POS doesn’t support the option, it leaves the retailer with fewer options to strategically tailor offers to target customers.


3. Protect margins and measure ROI

While offering a loss leader may be an effective strategy for some retailers, most would agree the overall goal of promotions is to spark sales while protecting thin margins. With many retail applications, there is little insight into which promotions are the most effective, which customers are generating the most revenue, and whether loyalty and rewards programs are profitable for the company, especially when promotions or loyalty tracking goes on outside of the point of sale system .


4. Managing loyalty and rewards programs

Retail loyalty and rewards memberships are more popular than ever, with more than 80% of adults in the US belonging to some type of loyalty program. While customer loyalty programs are proven methods for growing and sustaining a loyal following, many retailers lack comprehensive reporting tools to accurately measure the performance of their loyalty programs. It takes an investment of time, creativity and money to launch a loyalty and rewards program, so to be worthwhile, they need to fulfill the expectations of both the consumer and the retailer. Retailers need answers to some basic questions, like: Do loyalty and rewards programs really increase customer shopping frequency and sales? And, are we taking full advantage of the wealth of consumer information these programs offer?


Promotions are an important part of the retail landscape, so it makes smart sense to manage them effectively, efficiently and flexibly and to monitor them closely to ensure a continuing return on investment. With the right tools and approach, retailers can deliver a unified shopping experience, nurture the brand-customer relationship in an omnichannel environment and capture every sales opportunity.


Cegid’s Promotions Management module is a flexible and powerful solution that empowers retailers to create, execute and monitor even the most complex promotions, ensuring your customers have the experience you intended and your organization achieves the ROI you expect. Promotions Management is part of the industry leading retail and POS solution, Yourcegid Y2. We’re transforming how retail brands create seamless omnichannel shopping experiences for their customers. Learn more about Promotions Management here.


[1]. National Retail Federation
[2]. RSR Retail Pricing Study, 2018

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