Retail Marketing and Promotions
Retail marketing is local: catchment, footfall, conversion and basket value. Exam items ask you to design a promotion, compute its effect and choose the right medium for a neighbourhood store.
The sales funnel
- Footfall = number of people entering the store.
- Conversion % = transactions ÷ footfall × 100.
- ATV (average transaction value) = sales ÷ transactions.
- Sales = footfall × conversion × ATV.
- Basket size = units per transaction; attach rate measures cross-selling success.
Promotion mechanics
- Discount, BOGO, bundle, coupon, cashback, loyalty points, sampling, contests and festival windows.
- POP and POSM: danglers, shelf talkers, standees, floor stickers, end-cap displays.
- Local media: WhatsApp broadcast, SMS, pamphlets, hoardings, society tie-ups, Google Business Profile, Instagram.
- Plan on a calendar, state the objective (traffic, clearance or launch), set a budget, and measure lift against baseline.
Worked example
Footfall 1,000, conversion 25%, ATV ₹800 gives sales of 1,000 × 0.25 × 800 = ₹2,00,000. Now test a BOGO on a ₹100 item with a 40% gross margin: cost per unit is ₹60, so selling two for ₹100 costs ₹120 against ₹100 revenue - a ₹20 loss per transaction. The offer must be reworked before launch.
Traps that cost marks
- Confusing footfall with conversion.
- Judging a promotion by sales alone rather than lift over the baseline period.
- Running deep discounts without checking the margin.
- Advertising an offer without ensuring stock and staff are ready.