The Promo Calendar is Dead. Long Live the Promo Calendar.
The retail promotional calendar is how almost every retailer has planned for, managed and executed its seasonal promotions and discount activities. There’s just one big problem with this approach: it doesn’t work. It isn’t well-suited for today’s retail industry, and hasn’t been for some time. The entire landscape is changing at a faster pace, and more than ever before retailers need newer processes and workflows to adapt to dynamic changes in the marketplace.
Most retailers will admit it’s not the best approach given the rate of change in today’s retail landscape. So, what gives? The simple answer is inertia and a fear of risk taking. However, if it’s broken, shouldn’t we expect more retailers to try to fix it? Besides organizational sluggishness and change-management obstacles, many retailers simply don’t have the time to figure out the “better way” and lack the expertise and technology systems to change the old way of doing things successfully.
Disrupting the century-old promo calendar requires a significant paradigm shift that's not for the faint of heart. It’s a philosophy change, a culture change, a digital transformation commitment and a recognition that the promo calendar as we know it is dead.
The Status Quo
Let’s start with what’s broken. The promo calendar has several basic components:
- The “When”: Holidays and the duration/timing of those holidays.
- The “What”: Offers/discounts and product assortment pertaining to those holidays.
- The “Who”: The parties involved in planning and executing the components above.
The problem, surprisingly, isn’t entrenched in the holiday schedule. It actually has to do with the planning surrounding the “what.” When asked why a retailer is running a specific set of discounts, the typical response is, “it’s what we did last year.” In a retail environment that's changing every six months, the reboot strategy has all but lost its effectiveness. It’s the lazy approach by businesses, many of which are facing existential threats at this time.
Imagine a new-age Hi/Lo retailer. This multichannel retailer leverages a sophisticated marketing technology stack to manage its campaigns, customer data and content. Its campaigns still account for key drive periods and holidays mapped out on a calendar, along with merchandising and assortment goals. However, one key thing is different: the offers aren’t pre-determined.
By leveraging a new type of technology, called an offer management platform, retailers can dynamically deliver optimized discounts to individual customers at any time throughout the year. This can all be done within the context of the overall creative and merchandising content that's appropriate for each particular holiday. This new system can identify how much to discount a particular item, basket of items, or category of items for a specific customer in real time. In the new paradigm, marketers focus on creative, messaging and campaign execution within the stable of holidays and events on the calendar. With a larger focus on internal customer behavior, third-party data and artificial intelligence capabilities, marketers should see stronger product margins and fewer discounts given throughout the year.
Marketers don’t have to make the impossible decision of picking the ideal offer in advance and aligning to each campaign. This new process reduces one variable among many, which allows marketers to free up time to focus on higher-level strategy and improve overall marketing performance. It may be the death of the promo calendar as we know it, or it might be an evolution of the promo calendar that incorporates innovation that make it easier for marketers to execute smarter offers.
Jonathan Treiber is CEO of Revtrax, an offer management platform that works with clients such as Express and Men’s Wearhouse.