The UK’s alcohol category has more than twice the amount of in-store and on-pack promotions as its closest competitor, according to new research into British supermarkets.
By category, alcoholic drinks made up 28% of all promotions, while breakfast cereals made up just 13%. This was surprising, according to promotions specialist Hive, because large cereal box packaging gives the segment an inherent advantage in terms of promotions potential over alcoholic drinks; cereal boxes provide a lot of space for promotions to be communicated, creating eye-catching designs and driving sales.
Dairy and spreads was the third biggest contributor – the only other category to account for more than 5% of the overall promotions mix.
© Hive
The top five FMCG brands – Nestlé, Procter & Gamble, PepsiCo and Unilever – are all using promotions to drive sales and increase engagement, the study said.
And Hive found that 60% of promotions are now enabled by unique codes, with almost 90% requiring purchase – a shift in direction on previous years, when purchase was not necessary.
Jonathan Jackson, CEO of Hive, explained: “Traditionally, FMCG brands have used multi-buy and buy-one-get-one-free deals to drive sales, but supermarkets have begun to scale back these offers and are moving towards everyday low prices. With 70% of purchasing decisions taking place in the aisles, the brands are responding with new ways to drive sales. Our research shows that FMCG brands, particularly breakfast cereals and alcohol, are using promotional packaging to stand out and drive sales.
“We see a real divide between… weak promotional methods such as asking for photos of packaging, entering a batch bar code or just online entry, and strong methods using unique codes. Without strong proof of purchase verification, anyone can enter the promotion on offer without buying the product. The promotion does not necessarily drive sales. The use of unique codes helps to increase sales by an average of 8%.”
The research was conducted on products in three of the UK’s largest supermarkets: Sainsburys, Asda and Tesco.
Carey Trevill, managing director of the Institute of Promotional Marketing, said: “Retailers and shoppers are in a race to grab attention with promotions that work. Hive’s snapshot into these three stores reveals that some brands and categories are working more effectively than others to promote effectively at point of purchase. Packaging is key to ensuring brands stand out and the way this platform is now used will bring success for brands, while delighting consumers who interact more and more with packaging.”
Hive pointed out that no purchase necessary promotions do not result in a sales uplift, and that unique codes printed on packaging were by far the more popular way of running purchase necessary campaigns. They accounted for more than 35% of all purchase validation mechanisms, compared to just 18% for online entry and 7% for vouchers.
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