Orders In Seconds

Trade Promotions

What are Trade Promotions? (with examples)

Share on pinterest
Share on linkedin
Share on twitter
Share on facebook
Share on email

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:

  1. Introducing new products (i.e new food or beverage/ health or beauty product) or 
  2. 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


In-store Displays

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.

In fact, research shows that 16% of impulse purchases were made in response to in-store displays, like:

  • Floor stickers
  • Posters
  • Banners
  • 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

The main influencing factor in purchasing decisions is price, with 89% of customers naming this variable as determinant in their purchases (source) . Manufacturers and wholesalers apply sales and discounts to encourage repeat business from current retail customers and to draw in new ones.

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.)

It’s noteworthy to mention that the mobile sales app a wholesale distributor or CPG brand  uses should feature custom promotions during the order taking process based on retail customer and good reporting to track and gain insightful metrics on a trade promotion’s success.

Let’s check out an example of a deal:

 Black Friday Deal by Oliver’s & Co.

 

Bundles

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:

Dove Bundle



Sales Contests

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.

Read a great article about the success of S. Abraham & Sons (SAS) Inc. who reportedly grew candy sales by more than 30%, with contests and promotions. They pushed certain candies during #nationalcandymonth in June. See the example below:

Candy Contest & Promotions



Rebates

In contrast to discounts or coupons, which are deducted at the time of purchase, rebates are provided after payment. According to Incentive Insights rebates make consumers 75.4% more likely to make a purchase. Making rebates a successful promotional strategy because they appeal to both impulsive and cautious buyers. The only thing is, people will buy a product, love the thought of saving, even if they never cash the rebate. 

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

If done properly, trade promotions can increase your bottom line by 10 to 15 percent, according to a study done by PwC. Trade promotions expose new products to your customers and may influence them to buy ones they ordinarily wouldn’t. Additionally, it makes upselling and cross-selling products simpler.

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.

Increased Profitability

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.

Final Thoughts

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.

Orders in Seconds Pricing | Sales Order Management Solution

Quick Start Guide for B2B Wholesale Distributors

5 Step Guide to Maximizing Store Visits & Doubling Your Sales Orders

Quick Start Guide for B2B Wholesale Distributors

5 Step Guide to Maximizing Store Visits & Doubling Your Sales Orders