What are Trade Promotions? (with examples)
No brand is immune from competition. To stay afloat, consumer packaged goods (CPG) brands and wholesale distributors need to view their relationship with retailers as a strategic partnership, and employ specific marketing tactics.
One way a B2B business can expand its clientele, foster client loyalty, and boost revenues is through trade promotions, which allows both retailers and wholesale distributors or brands to experience success on the shelf.
This article simplifies trade sales promotions and introduces readers to various examples and their advantages. So what are trade promotions? Let’s find out.
What are Trade Promotions?
Trade promotions is a marketing strategy B2B wholesalers and CPG product brands use to attract more customers. They make use of special pricing to generate demand for certain items by making them more attractive to potential retail buyers (including restaurants, convenience stores, bodegas, hotels, cafes etc..) and to boost sales in the distribution channels.
Trade promotions are an important piece to a successful relationship between the wholesale distributor and CPG brand and require both to carry out.
This promotional strategy is useful when:
- Introducing new products (i.e new food or beverage/ health or beauty product) or
- Seeking to increase awareness about innovative product features (i.e nail polish that changes color in the sun or health drink that includes a unique fruit)
All of which incentivizes resellers to buy more of the product and increase the product’s accessibility to the final customer.
5 Types of B2B Trade Promotions with Examples
The first step in making a sale is grabbing the customer’s attention, and cleverly designed in-store displays achieve just that. It’s all about drawing attention to the product inside the store to encourage impulse buying.
- Floor stickers
- Life-size display stands
- In-person product demonstrations
- Promotional fixtures
Each one strategically placed in retail stores that aim to catch customers’ attention and make products stand out. See example picture below:
Essentia Water Summer In-store Display
Deals and Discounts
Deals and discounts can take many different forms, such as:
- Price cut
- Percentage off
- Tiers of discounts (the more you buy, the more you save)
- Unique deals (buy X, get Y at a lower price/percent discount/free, etc.)
Let’s check out an example of a deal:
Black Friday Deal by Oliver’s & Co.
Who doesn’t want customers buying 3 or 4 products instead of one? An excellent strategy to boost sales is to bundle and sell multiple products as single offers. For example, pairing and selling slow-moving products with the most popular ones. This encourages customers to purchase a variety bundle rather than each item separately for a greater price, increasing sales. Product bundles improve value for money from both the retailer’s and the consumer’s perspectives, below is an example:
People love winning prizes, which is why sales contests are such a great incentive for retailers. Contests create friendly competition and gets people interested in winning. Usually, the goal of sales contests is to encourage retailers to sell more of a specific product in their stores. In return, the retailer that sells the most is compensated with a monetary bonus or exciting gift. Possible prize ideas include, money, vacation trips, products, or other services.
Candy Contest & Promotions
As a result, rebates offer retailers the benefit of giving customers a temporary discount on a product, to stimulate sales, while allowing it to maintain its current price point. CPG brands benefit because of a demand increase, but since not everyone cashes the rebates, there is no significant impact on profit margin. Making it a win-win for everyone (as long as you cash your rebate).
See the example below of a rebate offer:
Coors Light Beer Pure Rebate
What are the Benefits of Trade Promotions?
Trade sales promotions can benefit B2B companies in a variety of ways. Here are some reasons a company might offer a trade sales promotion:
Increased Order Size
Faster Order-to-Cash Cycle
Every business must operate swiftly, and wholesale distributors and CPG brands are no exception. B2Bs must take advantage of trade promotions to create a sense of urgency or FOMO (fear of missing out) as a motivator to accelerate sales while minimizing costs on supply chain resources.
Trade promotions can boost revenue for B2Bs in a number of ways. By growing their customer base, generating revenue from current retail customers who want to take advantage of various promotions, and, of course, by making the product more appealing to the end user. For example, providing free product samples can encourage a retailer’s customers to try a new product.
Improved Customer Loyalty and Nurturing Relationships
Trade promotions are a great way to build and maintain loyal B2B relationships between wholesale distributors, CPG brands and retailers. Providing indoor displays ,discounts, rebates and bundles to resellers promotes a mutually beneficial relationship for financial gain and growth as partners in the supply chain. Other forms of trade promotions, such as sales contests, can draw new clients and reward existing customers, increasing customer satisfaction and keeping loyal customers.
Trade promotions are a key part of any brand-retailer and wholesaler-retailer relationship. By keeping an eye out for mutually beneficial trade promotion ideas, it’s possible to strengthen your B2B partnerships, enhance your brand and increase sales. Keep these trade promotion examples in mind when building your next sales strategy and watch products fly off the shelves.