Item-level promotions have been a tried-and-true tactic for driving sales and building loyalty in the grocery industry for decades. But what many general merchandise brands across the homeware, apparel and sporting goods categories don’t realize is that they too can use item-level promotions to convert sales. Doing so allows these brands to cut through the noise of busy seasons and years, like 2024 will likely be.
Instead of temporary price reductions on the shelf or offering mail-in rebates, brands can incentivize shoppers with cash back at the item level to meet consumers at the point of purchase, influencing them to take that final step and convince them to purchase a certain product over a competitor’s. This allows brands to meet shoppers where they are while driving measurable results at the item level.
Now, more than ever, brands should invest in true performance marketing tactics, particularly item-level promotions, to drive purchase decisions and spark incremental sales.
Cut through the noise
Anytime things get noisy—whether that’s Black Friday, back-to-school season or during an election year like this year—marketing spend decisions become even more important as the likelihood of wasting dollars is higher when there is more competition over mindshare.
During these busy times, brand share of voice will be smaller due to the intense commotion and clutter across social platforms and traditional media. This also means people will be more distracted than ever. Advertisements will become overwhelming, and politics will command many people’s attention.
While marketers need to continue to invest in innovation and push out new products, it is necessary to consider that during these times of busy news cycles, consumers are strapped for time and focus more about the final purchase decision—and what that purchase will cost.
Offer what consumers really want
Consumers love convenience, and they love to save money on purchases. Meanwhile, brands are looking to find ways to drive measurable incrementality without resorting to temporary price discounts on the shelf, which reduces net profits and brand equity.
This is where item-level promotions come into play. These kinds of offers provide extreme value and convenience by meeting the consumer at the point of purchase when they are making their final decision between Brand A or Brand B. It’s the critical moment to cut through the noise and deliver what the consumer wants, which is cash back in their pocket. Furthermore, offering an omnichannel experience and having these offers available both in-store and online gives brands a competitive advantage over major online retail competitors, which is yet another channel brands are battling.
Let’s consider a little girl’s birthday wishlist as an example: It includes both a Barbie Dreamhouse and an American Girl Doll set. If a parent can get cash back on one of the toys and not the other, they are most definitely going to be purchasing the item they get cash back on and will likely act the same in every similar scenario. Shoppers feel better about splurging on something special when cash back offsets their investment.
In shopping situations where consumers know they will be making a purchase, whether or not they receive cash back is likely going to be the determining factor in which brand they choose. Another example is shopping for a new TV, in which the consumer is looking for value off the sticker price. If they’re able to get cash back on one TV of a similar price to a competitor, it’s very likely they’ll choose the item they get cash back on.
In fact, when a leading toy brand implemented item-level offers, over 95% of shoppers chose its product over a competitor, with 16% of those shoppers being either new to the brand or converted from a competitor. Getting cash back in their pocket feels like a small reward for making the purchase and choosing the product they did.
Driving sales is all about location—and item-level promotions meet consumers at the right place in order to complete that sale. Brands need to offer an exceptional omnichannel experience at the point of purchase with a compelling offer, enticing shoppers to choose their product over others.
Right now, shoppers are more distracted than ever and may not hear a brand message or may scroll past an advertisement, but they will see a cash-back offer in front of them. Brands investing in top-of-funnel marketing need to invest in sales-driving tactics. Otherwise, they’ll risk losing out, not just on driving incremental and measurable sales, but on the chance to build customer loyalty in a crowded marketplace.
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Jill Rosen Campbell oversees the teams that manage Ibotta’s retail and general merchandise partnerships, which offers retail and general merchandise brands a new, item-level, omnichannel approach to drive incremental sales.
