FMCG Promo Pulse: Jan - Jun 2022 vs 2021
Unveiling the Dynamics of Retail Promotions: A Comprehensive Analysis for 1H 2022
Navigating through the first half of 2022, the retail sector presents a complex array of trends and shifts. The interplay between traditional and modern promotion methods has reached a critical juncture. This analysis dives deep into these complexities, offering insights into the evolution of advertising platforms, the role of house brands, and the nuances of price competitiveness.
Evolution of Advertised Promotion: The Medium Matters
Social Media: The New Frontier
Accounting for 62% of total promotions, social media's dominance is a statement of shifting industry priorities towards quick, interactive, and visually appealing forms of communication. The 40% contribution from pharmacies opting for 'Range' promotions potentially signals an industry-wide move towards greater simplification and transparency.
Digital Media: A Paradigm Shift
Digital media, particularly softcopy and QR-based catalogues, have entered the scene as a significant player. The Aeon Group's dominant role in this space highlights how established retailers may be better positioned to pivot to new promotional channels.
The Decline of Physical Media: A Cautionary Tale
The 4% growth in Mailer promotions, predominantly from supermarkets, suggests that traditional forms of advertising are not yet obsolete. However, the downward trend in other physical media channels serves as a wake-up call for the industry.
The Understated Importance of House Brands
The 1% growth in house brands, spearheaded by Lotus and 7-Eleven, may seem marginal but could be a sign of strategic shifts to come.
The Intricacies of Price Competitiveness
A Balancing Act
The 4% rise in the average basket price, along with category-specific increases, indicates a complex interplay between profitability and customer loyalty.
The Milk Powder Phenomenon
The considerable growth in promotions for the Milk Powder category, especially in Mailer and Social Media, stands as an outlier that warrants attention.
The retail promotional landscape is undergoing a metamorphosis. The challenges lie in balancing the old with the new, understanding the subtleties of different product categories, and navigating a complex pricing landscape.
The overarching theme from the data is clear: diversification and adaptability are key. While social media and digital platforms have surged in importance, the persistence of traditional forms like Mailers indicates that a multi-channel approach is still vital. The modest but notable growth in house brands suggests that a diversified product portfolio could be a strategic asset in the long run. Meanwhile, the complexities in price competitiveness, from category-specific trends to overall basket price, highlight the need for retailers to be nimble and data-driven.
In this ever-changing environment, retailers need to be agile, adopting a flexible yet strategic approach to promotions. This will likely involve a mix of traditional and digital advertising, a diversified product portfolio including house brands, and a keen eye on price competitiveness metrics. This is not just about following trends but about anticipating what comes next, making calculated risks, and being prepared to pivot quickly when circumstances demand.
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