Survey: Brands Confronting Promotional Issues, Too

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Survey: Brands Confronting Promotional Issues, Too

By Path to Purchase Institute staff - 03/31/2020

As they continue to fulfill spikes in product demand, consumer brands are also dealing with an upheaval in their short-term promotional plans, according to an informal survey of executives conducted last week by Path to Purchase IQ.

While “addressing inventory needs” is the most common way that brands have been working with retailer partners to address the marketplace impact of the COVID-19 pandemic (cited by 54%), nearly as many respondents (51%) said they’re also changing their near-term promotional plans (see Chart 1).

“Making product fast enough” is how one respondent answered the question, “What is the single greatest challenge your organization is facing right now?” “We’re focusing on specific high-volume, high-throughput SKUs” is how that respondent's company is addressing the situation. Similarly, “Maintaining maximum food production while protecting employee safety” was cited as the greatest challenge by another respondent, with “Shifting production to highest-volume items” the solution. “We have prioritized our top SKUs; secondary SKUs will not be produced” said a third, who simply named “Manufacturing” as the challenge.

Asked which activities have negatively impacted their organizations, however, more respondents (55%) identified shopper marketing/consumer promotion than did inventory planning, distribution, manufacturing or fulfillment (see Chart 2).

“Customers are pulling back projects and slowing others,” said one respondent, referring to current conditions. “Distribution can't fulfill promotional needs — products aren't available,” said another. “We’re mostly waiting for buyers to come up for air from the urgent needs and get back to long-term planning,” said another.

Not surprisingly, dealing with “cancelling/postponing near-term programs” was named most often (51%) as the response to current conditions by marketing departments (see Chart 3). Another 40% said they’re “continuing programs, but changing the messaging content.”

“Grocers mistakenly think they don't need to be offering promotions to shoppers,” lamented one respondent. “In the coming weeks, this will be a mistake as shoppers with tightening wallets will be looking for deals.”

Although only one-third (31%) of respondents said they’re already changing long-term promotional plans (defined as 3rd quarter), concerns about the rest of 2020 were on the minds of many executives answering the “What is your greatest challenge” question.

“Understanding when shoppers will be back to a regular purchase cycle after stockpiling,” was cited by one respondent. “We working with retailers to address when we get back to normalcy.” “We are unable to plan activation when we don't know what restrictions will be in place later in the year or how shopper behaviors will have changed,” noted another.

“It’s hard trying to plan in the face of uncertainty,” summarized another.