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Trade promotions: The what, the how, and whys.

Trade promotions are marketing activities and incentives offered by brands to their customers at the point of purchase, particularly retailers (but can also include businesses like hotels, restaurants, and cafes).

From end-of-season sales to competitions; the scope of trade promotions is large - but can be distinguished into four strategies:

Modified pricing

This strategy works on conveying value and can offer your brand an edge in a competitive market by lowering the barrier to customer entry with limited-time sales, buy-one-get-one promotions, and coupons.

Retailer Competitions

Entices your customers to purchase a product through giveaways and contests.

Off-shelf branding

Creatively promote your product with eye-grabbing floor displays, product premiums such as bonus gifts, and posters.

On-site activation's

Ensure your customers understand your product as you intend them to by creating an experience! Enter new products into the market with samples or showcase new features with exciting demonstrations.

Every promotion and brand are different, but the most successful campaigns have 3 things in common that should be considered in every approach:

1. Buyers want you, but just don’t know it yet.

The main goal of all trade promotions is to convince shoppers who had no prior intention of buying your product. Win attention with unconventional displays or alluring bonus gifts or play for impulse buys with register displays.

2. Retailers and their employees will push brands they genuinely like, make sure you are on that list.

Building a strong retailer relationship is important in executing your promotion. Retailers will trust your brand if your strategy is backed up by convincing and accurate data. Building and rewarding loyalty with sales staff will also yield long-term benefits and create unofficial brand ambassadors on the floor.

3. Change your narrative to change your market.

Differentiate yourself from similar brands by telling a story of your product being used in a new way. Narratives can create new markets by encouraging the use of your product in certain environments.

Trade promotions, when executed thoughtfully and effectively – are a valuable approach in gaining a foothold in retail spaces, converting consumers into loyal shoppers, and growing your brand’s market share. In the 1960s brands were spending approximately 6% of annual revenue with retailers on trade promotions and marketing but in recent years this spend has increased to up to 22% - underlining the importance of these strategies.

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