Almost three-quarters (74%) of the UK’s top grocery retailers view a scarcity of prescriptive and actionable insights as their top operational barrier to enhancing promotions efficiency, research by Symphony RetailAI has revealed, a number one world supplier of built-in AI-powered advertising, merchandising and provide chain options for FMCG retailers and producers, has revealed.
This hole in analytics maturity is straight impacting the effectiveness of grocers’ promotions – the vast majority of respondents (82%) mentioned they have been dissatisfied with the outcomes they have been seeing from their funding in mass media promotional campaigns. 68% additionally mentioned they have been dissatisfied with the ROI on their promotional spend.
With the pandemic considerably disrupting the retail sector in 2020, Symphony RetailAI surveyed 50 retail executives – together with administrators, VPs and managers in areas equivalent to class administration and advertising – to grasp how promotions have carried out over the previous yr.
While many grocers have primary analytics capabilities in place, the outcomes present that they don’t seem to be at the moment in a position to act on the insights supplied by these instruments to tell and enhance future promotions. Asked about their top three challenges when leveraging knowledge and insights, respondents cited ‘a scarcity of prescriptive/actionable insights’ (74%), ‘an incapability to behave on insights rapidly’ (62%) and ‘an incapability to combine knowledge from a number of sources’ (56%).
“The dissatisfaction that grocery retailers really feel in the direction of the effectiveness of their commerce promotions is evident. But it’s unsurprising contemplating they’re clearly struggling to make use of knowledge proactively,” mentioned Jonathan Tye-Walker, director of income development administration, options consulting, at Symphony RetailAI.
“Without a granular stage of knowledge and a transparent mechanism for understanding and performing on the perception it supplies, grocers will discover segmenting their buyer base difficult. They may also battle to actually perceive shopper behaviour and plan promotions accordingly.”
The survey highlights how gross sales revenues from promotions are already reducing, with 26.4% being the typical share of complete gross sales on promotions in 2020 – in comparison with a mid-30s determine in 2019.
Grocers hinted that they count on this determine to lower additional by the tip of 2022, as soon as regulation affecting the promotion of merchandise excessive in fats, salt and sugar (HFSS) comes into drive. These rules will limit the placement and value of promotions, each in-store and on-line – and can embrace a complete ban on paid-for promoting on-line.
“To guarantee their promotional spend is being maximised, grocers should make higher use of their knowledge,” Tye-Walker added. “Predictive fashions, for instance, may help them to determine which classes they should put money into to see outcomes. This knowledge may also assist them to anticipate the adjustments which might be more likely to occur when HFSS rules take maintain subsequent yr.”
Symphony RetailAI’s commissioned main perception agency Incisiv to hold out this research.