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No one denies the need to promote products and brands. But how effective are your promotions? At a time of ramped-up competition from online behemoths like Amazon, every brick-and-mortar retailer must address this issue to survive.

Recent research on promotions in the grocery industry reveals these surprising stats:

  • 52 percent of weekly or monthly promotions go to customers who say they would pay full price anyway.
  • 52 percent of grocery shoppers say they would wait indefinitely for prices they consider “right.”
  • More than 65 percent appreciate prices that are personalized to their shopping habits.
  • Of the 37 percent of shoppers who receive promotional offers on items for they would have paid full price, more than half were either annoyed by the offers or say they would be less likely to patronize the store or brand in the future.

While promotions often work, obviously they can also backfire. That’s because most grocery retailers fail to analyze promotion performance effectively.

Knowing what works and what doesn’t — more precisely, knowing what entices rather than annoys your customers — has become increasingly important as Amazon, in particular, eats up the grocery industry’s market share.

One way of knowing is through effective category management, a process that creates a comprehensive plan to meet customers’ needs in a superior way. Amazon has institutionalized a customer-centric approach that continuously adds range and depth to meet customer needs and deliver personalized, relevant items and services.

Most brick-and-mortar grocery retailers can’t mine, analyze and deliver on the deep customer data the way Amazon does. But what they can do is use a mix of in-house and outside resources while doing better at what they already do best: Offer fresh foods in attractive, convenient and accessible settings.

Fresh foods, according to a Nielsen survey, represent 49 percent of the growth in sales across all fast-moving consumer goods categories, with fresh and perishable foods in stores generating sales nearly 14 times as high as all online food and beverages this year.

To compete and thrive today, savvy grocers are optimizing the effectiveness of their promotions in the following ways:

  • Mixing in-store customer data from things like loyalty programs with purchased market data from outside sources.
  • Adopting a customer-centric approach to category management using insights gleaned from customer data.
  • Attracting customers through space and merchandising management in the way Wegman’s is — by dedicating the second floor of a new, 146,500-square-foot store in an upscale mall to fresh food items.

It’s no secret how Amazon is dominating the market. The company is doing so through the careful analysis of customer attitudes, expectations and buying habits. Local grocers who know their customers are in an even better position to do so.