A ban on unhealthy special offers. But NEW research shows just how important BOGOF deals are to shoppers!

In recent years, the number of special offers and promotions in pretty much every aisle of the supermarket has steadily increased. In fact, according to data compiled for The Sunday Telegraph, in the run up to Christmas, 18,553 items were on special offer across Tesco, Asda, Sainsbury’s and Ocado. That means that around 1 in 5 products on the shelf were being promoted in some way or another. So clearly there must be benefits in having all these deals otherwise why would they do them. We also know that some promotions are much more effective than others, but the question we wanted to answer was why.

With this in mind we set about exploring how the different deal mechanics influence shoppers, beginning with understanding how the offers are processed by the brain. This itself threw up some interesting challenges: Firstly, it’s no use asking shoppers for their opinions of different types of promotion and special offer as they are mostly unable to verbalise how they make them feel (ergo, influence them). Secondly, most promotions in-store are mentally processed using the shopper’s working memory: An extremely inefficient part of the brain, managed by the prefrontal cortex and capable of retaining information for a maximum of 18 seconds. What this meant is that even if shoppers could explain what they thought of the special offers, they’d have forgotten the role their working memory played in the process before they even left the aisle.

In terms of sample size, we analysed the in-store behaviour of 8,128 shoppers across 11 categories, shopping in different supermarket and C-Store brands. The findings of this research are set to transform the ways both retailers and their suppliers deliver their promotional activity.

We have uncovered more than 100 specific aspects of promotional activity that have quantifiable and significant influence over shopper behaviour, attitude and emotion (how they feel).

Now that we more fully understand the influence of special offers and promotions on shopper behaviour we are able to provide retailers and brands with a much more scientific means by which they can tailor their promotional activity to their strategic business needs. Here are the headlines.

How the Offers Compare – Initial Stand Out

Firstly, promotions were more likely to be shopped after something else in the category has already been browsed: Think Secondary choice, more than primary visibility. But when it came to which offer was most effective at stopping shoppers in their tracks, BOGOFs were the clear winner.

The following chart illustrates where visiting shoppers first engaged with the category, comparing all the different offer types.

The best way to stop shoppers in their tracks was to present them with a BOGOF: This type of promotional mechanic was more than twice as effective as any of the other measured.

How the Offers Compare – Driving Visits

This next chart below, illustrates how effective each type of special offer was in terms of generating visits to it from shoppers.

Once again, BOGOF was the best way to drive engagement. It may be of note that the 2 best performing types of offer were the least mentally taxing to understand: BOGOF and ‘round pound’.

How the Offers Compare – Driving Sales

This next chart illustrates how effective each type of special offer is in terms of encouraging shoppers to buy a promoted item. Each number of sales is divided by the number of SKUs on offer to create the ratio shown.

Again, BOGOF was the best way to drive sales achieving a sales rating of almost 3 X that of an unpromoted alternative (1.83).

In fact, this data suggests that a lot of offers are actually less effective than is probably imagined when compared in this way.

Summary

This groundbreaking study also uncovered a host of further fascinating insights.

• Asda and Sainsbury’s shoppers are more likely to buy after evaluating if the product is on offer; Tesco shoppers, on the other hand, are less likely
• A ‘save’ offer that ends on some ‘random pence’ is much less effective at all levels compared with finishing it with either a round pound or a round .50p
• When it comes to Multibuys, the round pound ending is actually the least effective pence treatment for the offer
• When looking at all offer types and in particular the pence of the price point, we see that the round .50p is the most effective tool, by some margin
• Rounder price points are generally more effective on promotions, and overall round pound and round .50p perform very similarly
• The data suggests that the higher the percentage of Multibuys in a category, the less effective they become

The key takeaway from this study is that there is much more science to special offers than was originally thought, with apparently unimportant aspects of a deal actually having a considerable impact on shoppers reaction to it. Want to know more about the psychology of promotions? Let's talk.

My name is Phillip Adcock: I have more than 30 years of human behavioural research and analysis, and I can help you better understand shoppers and shopping.

If you would you like to know more about how shoppers and consumers think? Download my FREE guide now. Alternatively, check out www.adcocksolutions.com, where there are more FREE downloads available there. Or why not simply email me with what's on your mind?

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