While pure play ecommerce still only accounts for 5% of retail sales, the shift towards omnichannel engagement and the associated decline in in-store foot traffic – which dropped 9.8% in 2015 – is disrupting the role of brick and mortar marketing. Marketers are still trying to determine how these changes affect their in-store strategies and are finding themselves in an uphill battle to get customers through the door.

Promotions Galore

Brick and mortar’s solution? Promotions. For the past few years, retailers have been offering increasingly more in-store deals to encourage potential and existing customers to visit stores, engage with the brand and make purchases. The practice is creating a slippery slope, as pressure to beat previous years’ sales forces marketers to build an ever-growing number of promotions into their plans each quarter.

The result? Promo Proliferation. And as we’re learning from Macy’s’ challenges, ‘more’ isn’t always better. Macy’s fell victim to the vicious cycle of promotions, running almost 104 in-store deals each year. Of course, too much of a good thing can hurt, and endless promotions resulted in diminished brand value for the retailer as loyal customers began questioning the legitimacy of the “deals”, and ultimately, the integrity of the Macy’s brand.

Measuring Quality to Limit Quantity

Today’s marketers experience added pressures that didn’t exist before ecommerce and the internet, and the temptation to rely on promotions to get customers into stores can be overwhelming; however, marketers need to be creative rather than repetitive to maintain an efficient marketing spend and continue driving sales. Smart teams are doing this is by taking advantage of their point of sale data to be strategic in their brick and mortar marketing plans, allowing them to prioritize quality over quantity and bring an end to promo proliferation.

Point of sale data, provided to brands in the form of EDI spreadsheets and retail portals, includes information for each and every sales transaction, every single SKU, in every single store, every second of every day. Sounds like a lot of information, doesn’t it? Well that’s because it is – and it’s known as Big Data.

While most brands have access to heaps of POS data, only the most forward-thinking marketing teams are leveraging analytics solutions that turn complicated data sets into meaningful insights, allowing them to make more informed decisions about their marketing spend.

Smart Marketing with Data Analytics

Smart brands and their marketing teams are leveraging POS data analytics to create strategic brick and mortar marketing plans in three key ways:

1) Creating Region-Specific Marketing Campaigns

In retail, no other department is more closely tied to results of the sales team than marketing. Marketing teams are responsible for running new product launches, planning geographically where to push new product lines, and ultimately, measuring the sales results of their efforts.

So how can marketers help the sales team grow market share and increase sell-through at brick and mortar stores? The answer isn’t always easy, but whether launching a new product, or running a promotional campaign, knowing which regions will respond best is paramount. For example, POS data may help a team discover that Californians prefer their packages blue (like their politics!), or that Texans appreciate oversized packaging (after all, everything is bigger in Texas!).

2) Optimizing In-Store Product Placement

Just the other day I was having lunch with a Director of Marketing who sells a product line that goes hand-in-hand with hardwood flooring. He was telling me that sales for his product are up by nearly 100% versus last year, but only when facings are shelved in the hardwood flooring section. His challenge? The majority of his buyers placed his product line in a different aisle, and as a result, only one of his four major accounts attached sales of his products to hardwood floor sales at a rate above 50%. In fact, his largest buyer only had an attachment rate of 30%! He said that if he could increase the attachment rate in just that one account alone, his sales volume (and entire company’s revenue) would double.

POS data analytics provides teams with meaningful insights necessary to demonstrate the ROI of certain product placements, or even off-shelf merchandising opportunities like displays or end-caps, to their buyers. Having the data insights to demonstrate that their competitor one plaza over was able to grow sell-through volume by 40%, simply by organizing products on shelf in a certain way, is extremely powerful to marketing efforts, and ultimately, to sales.

3) Using Testing to Optimize Campaigns and Promotions

Then there’s the issue of comparing the costs associated with a campaign to its resulting sales lift. What’s the point in running a promotion, campaign or launch if you don’t have the capacity to measure its effectiveness, learn from previous efforts and implement successful strategies in future plans?

A frighteningly large number of marketing teams that I speak with “use their gut” rather than data to plan promotions. But this doesn’t have to be the case. Analytics help marketers measure the effectiveness of promotions, and the insights can help inform future promos, allowing teams to invest in more impactful campaigns. It goes without saying that plans including fewer, higher-quality promotions will always outperform larger quantity (and less effective) plans that ultimately erode brands.

The pressure on today’s retail marketers to perform, not only in creating omnichannel experiences but also in driving brick and mortar foot traffic, continues to grow. Fortunately, teams have a reliable resource in their point of sale data, so why not take advantage?