The previous chapter explored how advertising brings customers to your store. Now, let’s dive into retail promotion, which, as Dan Ramsey explains in “The Everything Guide to Starting and Running a Retail Store,” includes all paid or free efforts to get customers to act.

This guide will show you how to run a successful retail promotion, outline various strategies, and provide best practices for effective retail promotion.

Promotion vs. advertising: key differences

Advertising and promotion are terms often used interchangeably, but advertising is just one part of promotion. 

Promotions are like short ads, offering consumers incentives like free products, coupons, discounts, or risk-free trials. By providing reasons to shop with you, customers are more likely to act impulsively and sign up for your offerings.

Table showing the differences between retail promotions and advertising

Key benefits of retail promotions

Boosting sales and revenue

Retail promotions bring in more customers and boost immediate sales, increasing conversion rates and average transaction values. A survey shows that 93% of U.S. shoppers consider discounts and offers crucial in buying from a retailer or brand.

Use promotions to encourage customers to buy more or try different products. For example, a buy-one-get-one (BOGO) offer can inspire customers to add extra items to their cart. Additionally, promotions attract new customers who might have hesitated to try your products or services at the regular price.

Clearing excess inventory

When you have products that aren’t selling well or have too much stock, retail promotions are a quick way to get those items off the shelves. It is beneficial for seasonal items like holiday decorations or summer clothes, which may not sell as well after a specific time.

Using promotions to offer discounts or bundles on seasonal products helps generate interest and boost sales during specific seasons or events. This approach allows retailers to make the most of their sales opportunities while reducing the chances of having leftover unsold inventory.

Builds customer loyalty

Effective retail promotions build customer loyalty. When you consistently offer value through promotions, customers feel appreciated and become loyal. 

When customers feel valued and rewarded, they stick with your brand. This loyalty leads to repeat purchases, providing steady revenue and reducing the need to attract new customers constantly.

Stimulates impulse purchases

Promotions reflect our love for good deals and the fear of missing out. Impulse buys happen when people are drawn to a fantastic deal or worry about losing out on a limited-time offer. 

Retailers can capitalize on these impulsive tendencies by making promotions feel scarce or exclusive.

Collecting customer data and insights

Retail promotions offer a chance to gather important customer data. Customers who engage with promotions might join loyalty programs, subscribe to newsletters, or share information while purchasing.

Utilizing this information allows for refining target audience segmentation, crafting personalized promotions, and enhancing the effectiveness of future marketing strategies.

Types of retail promotion


Discounts involve temporarily reducing the regular price of a product or service, either by a fixed amount or a percentage of the original price. 

When deciding on discounts, consider whether they should apply to the entire store or specific products. While a storewide discount attracts attention, choose the option that aligns with your business strategy.


  • Quick sales stimulation
  • Attracts budget-conscious customers
  • Clears excess store inventory


  • Impacts profit margins
  • May devalue your brand if used frequently

BOGO (Buy One, Get One)

BOGO promotions mean you get a free or discounted item when you buy a specific item at the total price. Customers love these deals because they make spending money feel less guilty, giving them a sense of getting more for their bucks.

Highlight your BOGO offers prominently to ensure customers are aware of the offer. Verify that your stock can accommodate increased sales and simplify the retail promotion for easy customer participation.


  • Boosts sales volume
  • Creates a sense of added value
  • Helps move inventory quickly


  • Possible reduction in profit per item
  • Potential store inventory challenges
  • Unclear communication might confuse customers


Coupons are vouchers or codes that give discounts when used for purchases. They can be given out in print, digital, or mobile apps and be single-use or reusable.

Consider sending virtual coupons to first-time or big-spending customers. A coupon in their inbox makes customers feel special and prompts them to return to your store.


  • Easily trackable
  • Customer retention
  • Can be used to introduce a new product
  • Cross-selling opportunities


  • Possible misuse from the customer’s side
  • Potential revenue loss
  • Requires a solid system to track and validate redemptions

Loyalty programs

A loyalty program is a way businesses encourage customers to return by giving them rewards. These rewards can be things like discounts, points, or special perks.

To start a retail loyalty program, make a straightforward points system. Encourage people to join, provide personalized deals, keep them informed about their points, and improve the experience with technology such as mobile apps or digital cards.


  • Increases customer retention
  • Fosters a sense of loyalty
  • Provides data for targeted marketing strategy


  • High initial setup costs
  • The program’s management can be complex
  • It takes time to see the results
  • Rewards and discounts may impact profit margins

Seasonal offers

Businesses create seasonal retail offers as special deals for holidays or events, aligning with when people usually desire specific products. 

To implement these offers effectively, companies adjust their marketing strategies to match the season, create deals relevant to that time, modify product displays, use seasonal images, and promote the offers in various ways. 


  • Capitalizes on seasonal demands
  • Increases relevancy to consumers by aligning with current trends
  • Creates a sense of urgency among customers
  • Clears excess store inventory


  • The timeframe is limited
  • Not suitable for businesses that operate all year round
  • Intense competition with other businesses during peak seasons
  • Potential margin compression


Bundle promotion involves combining various products or services and selling them together at a discounted price. The idea is to encourage customers to purchase multiple items, making them feel they’re getting a great deal and spending more while also helping the store sell specific inventory.

To implement a successful bundle promotion, the store should carefully select complementary products, create appealing package deals, highlight the cost savings to customers, and set prices that make the bundle more enticing than buying items individually. 


  • Enhances perceived value
  • Encourages customers to try multiple products
  • Can help move inventory more efficiently


  • Potential reduction in profit margins
  • Store inventory must be managed well to guarantee the availability of bundled items

Partnership & collaboration

In a retail store, collaboration and partnership promotion means teaming up with other businesses to create marketing strategies that benefit everyone involved. It includes working together to promote products, share customer bases, and use each other’s strengths to boost visibility and sales.

To implement this, a retail store can forge alliances with businesses that complement its offerings. It might involve co-hosting events, promoting each other’s products, or giving discounts to customers who support both businesses. 


  • Shared costs reduce the financial burden
  • Cross-promotion opportunities 
  • Tap into the existing customer base of the partner


  • Potential conflicts in brand image
  • Coordination and alignment challenges
  • Balancing resources among collaborators
  • Relinquishing some level of control over certain aspects of the business

Implementing retail promotions in your business

Flowchart showing how to create retail promotions for your business.

1. Set objectives

State the goal of your promotion upfront. Here are some common objectives:

  • Boost sales
  • Increase customer foot traffic
  • Clearing excess store inventory
  • Introduce new products
  • Strengthen brand awareness
  • Encourage Cross-selling or Up-selling
  • Meet sales targets

Ensure your retail promotion goals are SMART—specific, measurable, achievable, relevant, and time-bound. For instance, set a particular percentage increase target within a defined time frame to increase your sales.

2. Know your target audience

Customize your retail promotions to suit your target audience, leading to better outcomes. By grasping what your audience likes, you can craft promotions that resonate with them, making it more likely for them to get involved and make purchases.

Examine customer details such as demographics, preferences, and behaviors. Take into account factors like age, gender, income, and location. This understanding enables you to design promotions that align with their interests, increasing their engagement and purchasing chances.

3. Choose the right promotion type

Choosing the right retail promotion depends on your goals and what your target audience likes. Different promotions work for other customers:

  • Discounts and Coupons: Grab the attention of customers who love a good deal on prices.
  • BOGO: Motivate customers to buy more with this enticing offer.
  • Bundling: Increase sales by offering value through combinations of products.
  • Seasonal Offers: Attract customers looking for timely and relevant deals.
  • Loyalty Programs: Build loyalty and encourage repeat business from your customers.
  • Partnerships: Collaborate with other businesses to broaden your reach and impact.

4. Promote effectively

Once you’ve decided on the promotion type, use a mix of marketing channels to reach your audience. This could include:

  • Social Media: Leverage platforms where your target audience is active.
  • Email Marketing: Send targeted messages to your customer base.
  • In-Store Signage: Use eye-catching displays to attract attention.
  • Collaborations: Partner with influencers or complementary businesses.
  • Paid Advertising: Consider online ads or local media to reach a wider audience.

Read more: Unlocking Growth: 19 Traction Channels for Business Success

5. Track and measure results

Set up a system to track important metrics for your goals. Monitor sales, customer engagement, and foot traffic during promotions. Analyze the data to see how well the promotion worked and find ways to improve it.

Get feedback from customers to learn about their experiences and preferences. Use this information to improve your strategies for future promotions and make your marketing strategy more effective.

Best practices for retail promotion

Keep promotions simple

Complicated promotions can confuse customers and make them less likely to join in. Keep retail promotions simple and easy to understand to boost participation, increasing customers’ chances to remember and act on them.

For instance, simplify sales promotion emails by focusing on the deal, adding a clear call-to-action button, and avoiding unnecessary text. This makes it easy for customers to click through and redeem the promotion.

Adapt when results don’t go your way

In the ever-changing world of retail, consumer choices are influenced by many things. If a promotion isn’t working as expected, it’s vital to adapt quickly. Regularly monitor metrics, use A/B tests, and adjust your strategy to avoid wasting time on ineffective marketing and respond promptly to market changes.

Utilize software to monitor promotions

Use software and analytics tools to assess your retail promotions’ performance quickly. Measure important factors like sales, customer engagement, and return on investment to determine what’s working and what’s not. 

With this data-driven insight, you can make smarter decisions for future promotions, making your marketing strategy more effective.

Provide good customer service

Don’t stop promoting after customers buy. Besides getting new customers, ensure the ones you already have are happy and want to return.

Map out the customer journey to understand their thoughts, actions, and feelings during buying. Identify areas for improvement, like better customer service, a smoother checkout, or regular communication to keep customer relationships strong.


In the competitive retail landscape, promotions are crucial for success. Integrating a dedicated promotions tool enhances strategies, unlocking more potential and offering valuable insights for better analysis and decision-making.

Use an ERP system to see your inventory, sales, and customer information. This helps you decide on promotions using accurate data, avoiding stockouts or overstock situations. Next, we’ll explore adding profitable lines and expanding your retail store.


Ramsey, D., & Ramsey, J. (2010). The Everything Guide to starting and running a retail store: All you need to get started and succeed in your own retail adventure. Adams Media.

Impact Insight Team

Impact Insights Team is a group of professionals comprising individuals with expertise and experience in various aspects of business. Together, we are committed to providing in-depth insights and valuable understanding on a variety of business-related topics & industry trends to help companies achieve their goals.

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