Crafting Holiday Promotions that Truly Connect with Consumers

By Jim Sills, CEO, ClearDemand

Promotions remain the primary motivator for driving foot traffic in grocery retail. The right promotions during the holidays capture larger higher-margin baskets while creating positive, long-lasting impressions on shoppers.

The holiday season is a time for gathering–whether it’s family around the table, friends sharing a festive meal, or colleagues enjoying a holiday potluck. For grocery retailers, the season offers a unique opportunity to connect with consumers through deals, making entertaining easier, more enjoyable, and stress-free.

But holiday traditions evolve, and so do consumers’ needs. Modern holiday shoppers often face the pressures of planning menus that accommodate diverse dietary preferences. Grocers must evolve if they expect to be the one-stop location for holiday food and meal preparation.

Understanding Holiday Shoppers

According to forecasts, holiday spending continues to climb, and consumers are expected to spend a record $902 per person, and non-gifts, such as food, candy, decorations, greeting cards and other holiday items, are expected to be $261 per shopper. While not often shown in the splashy commercials, grocery stores are the second highest holiday shopping destination, behind online shopping. In fact, 46 percent of adult shoppers will be spending money at those grocery locations, specifically for the holidays.

Holiday grocery shopping differs from any other time of year. Shoppers buy specialty items and ingredients they usually don’t. Retailers have a unique opportunity to drive impulse buying as shoppers wander around grocery aisles searching for items they don’t usually purchase.

Grocery retailers can connect with consumers by offering curated bundles for stress-free shopping. Promotions that pair holiday meals with wine will increase basket sizes and enhance the holiday experience.

The Keys to a Merry and Meaningful Promotion

Grocers can stand out this holiday season by crafting promotions that address the unique needs of holiday hosts and guests alike:

1. Highlight Seasonal Gatherings: Promotions should focus on the moments that matter. Position your store as the ultimate source for creating those cherished memories.
2. Offer Recipe and Pairing Inspiration: Shoppers often struggle with planning holiday meals. Consider featuring meal bundles with curated recipes that include all the necessary ingredients. Pair suggestions with complementary items, like holiday wines, craft beers, or festive mocktails. For example, a promotion for a roast turkey could include recommendations for seasonal side dishes and a perfect Pinot Noir.
3. Ease the Stress of Hosting: Help shoppers simplify their holiday prep by bundling items they might not think of, like cheese platters paired with crackers, dips, and wine. Include options for dietary restrictions, such as gluten-free, dairy-free, or plant-based bundles, to cater to a wide range of needs.
4. Encourage Bigger Baskets: Drive larger transactions by promoting your store as a one-stop solution. Showcase various items—everything from cocktail mixers to baking essentials—so shoppers can confidently check off their lists without visiting multiple stores.

Making Spirits Bright with Data-Driven Promotions

Yet, as grocers expand and change their offerings to capture the holiday demand, they must still meet their revenue, profitability, and sales volume goals. To do this, retailers increasingly rely on AI and machine learning to manage the complexities of holiday promotions.

Data-driven tools streamline the planning process and provide insights to help retailers analyze previous holiday campaigns, predict consumer responses, and make adjustments. Here’s how these tools bring precision to festive promotions:

• Suggest Promotional Items: Identify basket builders, traffic drivers, loyalty builders, margin drivers, and exploratory items to recommend optimal promotions.
• Improve Vendor Funded Deals: Balance promotional discounts with vendor-supported funds to optimize profitability while offering customers the value they expect. Optimization tools can help identify the best vendor funding and improve your negotiations.
• Tailor Promotions to Customer Preferences: Use historical sales data to segment shoppers and anticipate their needs, such as stocking more premium or specialty items that align with holiday trends.
• Identify Seasonal Opportunities: Machine learning can identify items that perform well only during a specific period, thus ensuring you promote them correctly, whether through ad placement, ad size, or discounting. AI and machine learning can also identify promoted items’ related affinities and cannibalizations.
• Optimize Flyers: To maximize lift, ensure your ads highlight products with high seasonal demand, such as holiday hams, dessert wines, or specialty cheeses, in strategic placements.
• De-risk Experimentation: Meeting changing consumer needs requires experimenting with new promotions, items, and offers. However, AI and machine learning can de-risk experimentation with more profound insights into possible outcomes and balancing experimental promotions with surefire winners, thus allowing chances to be taken.

Delivering Holiday Success

For grocery retailers, the holiday season isn’t just about transactions—it’s about connection. Grocers can increase loyalty and strengthen their brand by positioning themselves as part of the community and creating memorable gatherings. By focusing on holiday entertaining, stress reduction, and curated solutions, your store can become the go-to destination for every festive need.