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Death by a thousand cuts – Can too many offers undermine your promotion strategy?

As retailers use more and more promotions in an attempt to drive sales and customer traffic, the need to control conflicting promotions becomes increasingly important. Typically offers are created by multiple diverse groups within a retailer’s organization. Marketing creates offers to drive increased traffic and revenue, as well as the sale of higher margin items. Merchandising creates offers to move slow moving or highly stocked items, those approaching the end of season and so on. The CRM and loyalty groups also strive to drive loyalty and increased sales by employing relevant targeted offers, tailored to the specific customer or segment.

Compounding the problem, in many cases the diverse groups creating promotional offers are doing so in different systems, all with different functionality and without the ability to see what the other groups are doing.

The result is often that items receive multiple discounts or loyalty rewards, impacting the margin and profit much more than was intended. During the promotion creation process, retailers try to resolve this by highlighting overlapping and conflicting items, a time-consuming process., While this can ensure that offers do not apply to the same item, the problem is inherently more complex than that. For example, there may be a wish to make an item part of a buy 1 get 1 for 50% off offer whilst at the same time to be part of a buy a package of 3 for $25. Obviously, these offers do not actually overlap if the customer only buys 2, yet many centralized promotion definition systems would identify these two offers as overlapping and not allow both to be in play at the same time. These sorts of restrictions cause conflict between departments, don’t give the customer what they want and may result in lost opportunities to increase revenue.

Clearly, for retailers to resolve the issue of conflicting promotions, a sophisticated promotion execution solution is required that can automatically resolve conflicts between offers during the sale transaction, based on the items that are in the basket. Retailers need the ability to control the desired behavior when overlaps occur between different offers. Often this is simply to give the customer the best deal but they may wish to stack a series offers, one after the other, blocking those that don’t make sense, it all depends on the strategy and the contents of the basket. This approach allows the retailer to give the customer the offers they want, while ensuring margins are protected.

Helping Retailers

The XCCommerce Promotions Solution provides extremely fast yet sophisticated rules-based conflict resolution allowing the retailer to implement the offers they want while still protecting themselves from unintentional margin loss. The retailer can pre-define their business rules for the desired behavior of their various offer types eliminating the need for the business users to understand the complex settings and simply focus on creating the offer types they want.

Contact the XCCommerce team for more details on the extensive promotion functionality that is available in the Promotions Solution Suite.

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This article is presented by XCCommerce’s team of retail experts. Advising global leaders in the retail industry for over 20 years,
the team at XCCommerce has developed valuable retail insights and expertise.