Exploring the impact of retail promotion strategy on customer Essay

Exploring the impact of retail promotion strategy on customer behaviour - Essay Example From this research it is clear that the food retail industry is very competitive in the UK with retailers adopting strategies to optimise store performance and increase loyalty. This level of competition is likely to accelerate with recent headlines expressing concern over Tesco’s dominance of the food retail market. This is not a new concern as prior to these reports, the regulating standards body prevented Tesco from acquiring Safeways over fears that the industry would not be competitive. The food retail industry is also one which is characterised by tight profit margins as customers in this industry are constantly on the lookout for value for money in terms of prices offered. This has resulted in food retailers adopting various promotion strategies in a bid to control customer behaviour, and the bulk of the promotion strategies seem to have focussed on loyalty. Other promotion strategies that have been used include blanket couponing and one-to-one marketing. These strategi es have also relied on recording customer shopping behaviour, and the information collected is often used to ascertain what customers’ buy, the frequency with which they buy these products and when they buy it. This information is then used to give the customer coupons or vouchers that are specific to their frequent purchases. Some food retailers like Aldi’s and Lidl’s have not adopted any promotional strategies and instead they have gone for low pricing on the basis that it introduces stable pricing to customers.