The Transformative Trends of Promotional Strategies in Retail for 2022
In an era where digitalisation is less of an option and more of a necessity, retail promotion strategies in 2022 were no exception. One of the most significant changes was the newly added digital media source type. Contributing to 5% of total promotions, it performed on par with traditional platforms like newspapers. The majority of these promotions (95%) were of the 'normal promotion' variety, with the remaining 5% for specialised promotions like 'Range Promo' and 'Buy X Free Y'.
The Social Media Paradox
While digital media sources were on the rise, the once-dominant social media saw a 9% decline compared to the year-ago figures. Despite the drop, it still commanded a whopping 60% of the total promotional share across all platforms, maintaining its relevance in the promotional landscape.
Quarterly Highlights
The last quarter of 2022 (Q4) saw a nearly twofold increase in digital media features. Retailers and suppliers were quick to capitalize on the digital wave, even as other promotional sources remained stagnant. The festive seasons in January and March were particularly strong for mailer and social media promotions, although they did experience a sharp decline in February.
Retail Giants and Market Share
The digital media promotion arena was largely dominated by hypermarkets and supermarkets, accounting for 78% of the total. Leading the charge was Aeon Group, contributing 58% to the overall promotional sources. Despite its decline, social media's downturn was mostly attributed to a 22% decrease from local supermarkets.
Diversification in Retail
Beyond Aeon Group, other retailers like Giant, Mydin, and Lulu have also adapted digitalization. Grocery remained the most promoted department across digital media, while Health & Beauty led in mailer and social media sources.
Product Categories: What's Hot and What's Not
While all top three categories in social media promotions saw a decline, Fresh Produce found its focus in mailer, digital media, and newspapers. Health supplements saw an increase in all mediums except newspapers, possibly due to the reduced press ads by key suppliers like Watsons and Zuellig Pharma.
Financial Snapshot
The average basket price in FY 2022 increased by 5% compared to the previous year. Categories like Frozen Food, Meat, and Yellow Fat observed a significant increase in promo prices, ranging from 13% to 23%.
Conclusion
In summary, 2022 was a year of transformative shifts in retail promotional strategies. Digital media made an impactful entrance, asserting itself as a force to be reckoned with alongside traditional platforms like newspapers. While social media experienced a dip, it still holds a significant market share, proving its resilience. As retailers and brands continue to diversify their promotional channels and adapt to the changing landscape, it's clear that a multi-pronged approach is becoming increasingly vital for success in today's market.
Analyst Insight
The most striking trend of 2022 was the rise of digital media as a viable alternative to traditional promotional platforms. While social media saw a dip, it remains an integral part of the promotional mix, suggesting that brands may need to adopt a more hybrid approach in the future. The decline in social media promotions from local supermarkets is particularly noteworthy and could signify a shift in strategy.
The festive seasons continue to be a crucial period for promotional activities, but the sharp decline in February indicates a potential area for strategy adjustment. The concentration of promotional activities in hypermarkets and supermarkets, especially by the Aeon Group, reflects the growing importance of these retail channels.
Going forward, it would be interesting to see how diversified portfolios across different media will fare, especially with new players entering the digital media promotion space. The increase in average basket price also hints at inflationary pressures that retailers need to consider in their promotional strategies for the coming year.
In conclusion, the year 2022 was transformative for retail promotions, with digital media making a strong entry and social media requiring some strategy reevaluation. As we move into 2023, a hybrid approach combining both traditional and digital media seems to be the way forward.
Don't Miss the Full Analysis
Download the complete report and arm yourself with the intelligence you need to stay ahead of the curve.
Don't miss your opportunity to gain a competitive edge.