Half of on-pack promotions are now digitally enabled with unique codes
New supermarket research by Hive also finds the top five FMCG brands are all using on-pack promotions to drive sales and increase engagement
New research by Hive, the experts in unique code enabled promotions, provides a fresh look into the current state of on-pack promotions. The market research was carried out at three of the largest stores belonging to the UK’s biggest supermarket brands: Asda, Tesco and Sainsbury’s. The research uncovered new insights on how major FMCG brands are finding ways to increase sales in an industry characterised by fine margins and competition, with all the top five global FMCG companies using promotions on the packaging of at least one of their brands.
49% of promotional tools used by brands in-store are unique codes and 25% require online entry. Just 8% used vouchers, showing a shift toward new technologies from traditional cut-out coupons.
Unique codes provide a strong proof of purchase method that allows brands to precisely target promotions that drive sales. For example, McVitie’s made a cost saving of 80% using Hive’s unique codes technology and increased their frequency of purchase by 30%.
Carey Trevill, Managing Director at the Institute of Promotional Marketing (IPM) says “Retailers and shoppers are in a race to grab attention with promotions that work. Hive’s snapshot into these three stores reveals that some brands and categories are working more effectively than others to promote effectively at POP. Packaging is key to ensuring brands stand out and the way this platform is now used will bring success for brands, while delighting consumers who interact more and more with packaging.”
Jonathan Jackson, CEO of Hive, explains: “Traditionally, FMCG brands have used multi-buy and buy-one-get-one-free deals to drive sales, but supermarkets have begun to scale back these offers and are moving towards everyday low prices. With 70% of purchasing decisions taking place in the aisles[1], the brands are responding with new ways to drive sales. Our research shows that FMCG brands are using promotional packaging to stand out and drive sales.
“We see a real divide between these weak promotional methods such as asking for photos of packaging, entering a batch barcode or just online entry and strong methods using unique codes. Without strong proof of purchase verification, anyone can enter the promotion on offer without buying the product. The promotion does not necessarily drive sales. It is clear that brands are finding it easier and more affordable than ever before to print unique on-pack codes to run effective promotions.”
Digitally enabled packaging, using unique codes entered online, allows brands to take advantage of the digital space in ways not previously possible using packaging alone. Unique codes, when entered online, can give the brand a plethora of information such as the sku purchased, the factory the product came from, and the supermarket it was bought from. But, more than this, it gives brands information about who buys their products. This is a consumer-friendly way for brands to enrich what they know about their average shopper. With repeat code entries it forms the basis of building brand loyalty.
Jackson continues: “Not only do brands still get the sales uplift that is so important to them, but the marketing team can additionally find out about who is buying their product as well as when and where they are buying it. They can adapt their marketing plans in response to this information. It’s a game-changer for marketing teams.”
Download the full report here
1: The 70 Percent Rule can be traced back to a 1995 study initiated by Point-of-Purchase Advertising International.
