Promotion Effectiveness: How Do Promotions Change Shopper Behavior in the Long Term?

Employing promotions to encourage purchases is becoming business routine. However, it is essential to understand how promotions influence shopper activity in the long term. In part 6 of this series, we break down how promotions change shopper behavior and advise on how to capture the potential in successful promotions management.

Most companies respond to negative market dynamics by engaging in more intensive promotional activities, recently witnessed in the markets affected by the COVID-19 pandemic. In doing so, companies try to “buy” market share and sustain their top line. Although these promotions will generally boost sales volumes in the short term, our experience shows that buying market share beyond the level deserved by product quality is detrimental to profitability and dangerous for sustainable business in the long term. Why so?

Promotions shape shopper behavior in the long term

Shoppers get used to promotions…