Expert Insights into Promotion Management in Today’s Omnichannel World

Dan Pahomi, JustEnough’s Vice President of New Business Initiatives, recently shared some thoughts on the importance of promotion management in today’s omnichannel retailing world with RIS.

Q: How would you define promotion management and why has it become a prerequisite in today’s omnichannel retailing world?

Dan Pahomi:  Promotions have evolved from merely activities used by the advertising department to promote products to include all customer-facing tactics and communications used across multiple departments. Promotion management is the practice of planning, creating and executing customer communications to ensure that the right message reaches the right customer at the most relevant time. Because of the ever-increasing ways to interact with customers, retailers are not able to present a unified message to the customer without coordination between all departments involved in the process. Effective promotions can no longer be created in a stand-alone environment. Understanding each promotion’s role in the overall campaign is extremely important. For example, a promotion that emphasizes a brand may not be that relevant by itself, but it can provide important brand awareness if executed at just the right time. It’s like an orchestra. Each promotion is an instrument and they have to come together to create perfect harmony.

Some retailers are reporting up to a 50% reduction in the time it takes to plan promotions allowing them to get to market much faster than their competitors.

Dan Pahomi, Vice President of New Business initiatives, JustEnough

Q: What do retailers continue to struggle with when it comes to supporting promotion management?

Pahomi:  We see retailers struggling in three distinct areas when it comes to managing promotions:

Understanding customers. Retailers not understanding who their customers are and what they want is still one of the biggest struggles. Even though the amount of customer data has increased exponentially in the past several years, many retailers are still challenged in finding relevance in the data. Because of this, promotions often miss their mark and do not produce the expected results.

Old techniques. Applying old techniques to new challenges is another area that many retailers still struggle with. They realize that with new communication channels and more sophisticated customers, they need to adapt and change how they reach them, but this understanding is often not reflected in their actions. One glaring example is the imbalance of advertising budgets that are heavily invested in newspapers while readership has been steadily dropping, especially in the younger demographic.

No foundation. For some retailers the struggle comes with the introduction of new processes and systems. Applying new techniques without a solid foundation may help in the short term, but cannot be sustained. The most common issue we see is the lack of consolidated and centralized systems. Different channels are still being planned by separate teams using different systems without coordination.

Q: JustEnough promotes managing all types of promotions across all channels in a centralized system. How has this improved promotion management initiatives?

Pahomi:  As retailers are implementing new processes to go along with the new tools they have, we find that they are often surprised by the lack of coordination they had in the past and the duplication of effort that took place. As retailers start planning centrally, they are achieving higher ROI by reducing the time and effort it takes to create and execute promotions, by reducing costs and creating more relevant promotions that drive a higher customer response.

Q: What kinds of results are possible by using promotion management software?

Pahomi: The main areas of benefit are sales improvement, margin improvement and expense reduction. Both tangible and intangible results can be achieved using promotion management software. Some retailers are reporting up to a 50% reduction in the time it takes to plan promotions allowing them to get to market much faster than their competitors. They are also reporting improved inventory positions during promotional periods.