Everyday Low Prices Are Moving Merchandise Better Than Coupons, Short-Term Pricing Pacts

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In 70% of package-goods categories last year, at least 30% of merchandise was sold with some kind of promotional support, according to SymphonyIRI; that's up from 60% of categories four years ago. In all, two-thirds of categories saw increased promotional support last year. But average volume lift per merchandising event declined across more than half -- 57% -- of CPG categories last year, according to the research firm.

"We do believe there's a level of promotion fatigue out there," said Susan Viamari, the report's author. "Promotion has been very high in the industry over the past couple of years, even though we did see a moderation in the growth. CPG manufacturers need to evaluate everyday pricing strategies."
The other issue is that consumers remain tightfisted and economically distressed, and promotion isn't changing that, Ms. Viamari said. "Because more than a third of consumers are having trouble buying groceries, that option of stocking up just because something is on special is not a very easy option." More marketers need to tailor their shopper marketing to an individual level, she added, rather than use tactics such as temporary price reductions.

A study by Infegy's Social Radar found on average that 5.3% of social-media mentions of 14 CPG and apparel brands last year referred to deals, discounts or coupons -- and that percentage spiked to 7% to 11% by late in the year, almost double what it had been a year earlier. But all that chatter did not translate into sales gains for most companies.