Consumers Favor Discount Percentage Over Dollars Saved
SALT LAKE CITY– Quotient recently released its 2022 Promotions Report, which details the key variables of high-performing promotions and provides insights and recommendations to help brands and advertisers effectively plan and develop promotion strategies for the year ahead.
Quotient’s study examined campaign data from 300 CPG companies representing more than 800 brands and 128 product categories across drug, grocery, mass merchandiser and dollar store channels. The insights unlocked by this data are vital for advertisers to fine-tune their digital promotion strategy and maximize overall performance goals.
Additionally, the report notes tactics that are essential for a data-driven approach, including when to use demographic information and purchasing behaviors to target value-driven consumers who have shown prior interest in a specific product or category.
Some high-level findings from the Quotient report:
- The five key variables of promotion performance include: Category, Scale, Offer Value, Effective Discount and Required Purchase Quantity. All variables except for Category can be changed and optimized for improved outcomes.
- Quantity matters. Shoppers who activate promotions that require them to purchase three or more products are more likely to redeem those offers. (However, the bulk purchase activation is highest among non-perishable, shelf-stable items.)
- Offer value plays a major role in redemption rates. Quotient data found that even when offer value is high, consumers are less likely to redeem if the effective discount is insufficient to the price of the product itself.
- Scale is key for accurate campaign forecasting. While national and shopper marketing campaigns delivered comparable incremental dollars per activation, the Quotient study found that promotions with greater scale achieved more consistent results due to their ability to reach more consumers. National campaigns attracted the highest activation levels within the beverage, food and healthcare categories. By contrast, shopper marketing campaigns saw highest activations in personal care, household and pet products.
- OOH is an effective channel for amplifying promotions. “Despite the pandemic-fueled boom in eCommerce, most consumers still shop in-store or, quite commonly, through a mixed mode online/in-store approach,’ said Norm Chait, Head of OOH. “This creates the opportunity for brands to take an omnichannel approach where they interact with consumers at multiple touchpoints along the path the purchase. OOH is a particularly effective channel for amplifying promotions through media. By targeting venues and screens that over-index for their target audiences, brands can deliver their compelling value-based messages to consumers at moments when purchase intent.”
While the study was deployed pre-pandemic, Quotient reports it saw a 30% increase in active offers from 2019 to 2021. “What this tells us is that consumers are still very motivated by value-based messaging, making promotions a meaningful tactic for brands,” said Thalya Hamilton, VP Analytics and Data. “Then you have the current inflationary conditions, which have forced consumers to be laser-focused on finding value. We’re seeing consumers rely on coupons and discounts more than they did pre-pandemic, which makes promotions an essential tool for brands to strengthen their bond with consumers.”
Quotient (NYSE: QUOT) is the leading digital media and promotions technology company for advertisers, retailers and consumers. Our omnichannel platform is powered by exclusive consumer spending data, location intelligence and purchase intent data to reach millions of shoppers daily and deliver measurable, incremental sales. Quotient partners with leading advertisers and retailers, including Clorox, Procter & Gamble, General Mills, Unilever, CVS, Dollar General and Peapod Digital Labs, a company of Ahold Delhaize USA. Quotient is headquartered in Salt Lake City, UT and has offices in California, Cincinnati, New York, Bangalore, Paris, London and Tel Aviv.
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