🎓 Definition
Promotion intensity is the total sales generated through promotion divided by total sales revenue in a given period, it is expressed in %.
🧪 Example of Promotion Intensity
Assuming that an Outlet store launches a Mother's day Campaign. Through this campaign, the store generated $5,000 in total sales, of which $1,200 were generated from promotional items. To find the promotion intensity of this campaign, simply calculate by $1,200 / $5,000, which is 24%.
❓What Promotion Intensity is used for
Keep track of and monitoring promotion intensity allows Retailers and Manufacturers to measure how successful there are in promotion.
For Retailers:
- To measure how successful Retailer promotions are in driving traffic, penetration, and transaction.
- Retailers must maintain control over their promotion intensity levels as excessive promotions can result in reduced margins. As such, it's crucial for retailers to optimize both promotion efficiency and margin levels.
- Improved customer loyalty through the Targeted campaign: By consistently proposing promotions on products that Loyal Shoppers used to purchase, a Retailer can improve Shopper loyalty and encourage repeat business.
For Suppliers:
- Suppliers can gain a better understanding of the promotional strategies of their competitors, including the types of promotions they offer, the frequency of promotions, and the level of discount offered. This information can help Supplier to benchmark their own promotions against their competitors and identify areas for improvement.
- Suppliers may also monitor their competitors' promotion intensity to ensure that they are not losing market share to their competitors due to a lack of promotions.
💡 Tips
Promotion intensity can vary depending on the store format. Typically, larger store formats tend to have a higher promotion intensity compared to smaller store formats.
🖥️ Make it happen in Ariane
How to access Promotion intensity in Ariane: 2 Simple Steps
Step 1: Select the Promotion Evolution Menu in the Promotion Menu Bar
Step 2: Select Option in the Filter Menu and choose the period and hierarchy level you want to measure.
And here it is.
