They may have provided a lifeline for countless retail marketers in 2009, but classic BOGOF or pure-play two-for-one discount offers have had their day.

That’s the conclusion of 100 marketing experts from Britain’s biggest high street brands, whose opinions retail knowledge specialist Mohive has been tracking for the past 12 months. Most retail marketers, says Mohive CEO Lars Unneberg (pictured below), are now priming themselves for good causes in 2010.

Unneberg said: “As we reach the final stages of this year-long learning process it’s time to take stock, review and make some informed predictions about the trends most likely to gain traction in retail promotions in 2010.

“In February this year, just after the all important January sales’ season, ‘shell shocked’ is probably the best word we can find to describe the reactions of the retail marketers we tracked. For more than 85 per cent, the experience of trading in the new economy of recession
had been ‘dramatic’, even ‘unprecedented’; and in the after-shock of January’s disastrous promotions, almost every aspect of the marketing mix was being held to account.

“Deep cracks in a promotional process that had served admirably during the boom years were exposed as economic conditions worsened and our 100 retail marketers went on the defensive. Suddenly, promotional targeting was said to be seriously deficient, overly complex business processes were hindering campaign effectiveness, and outmoded internal comms activity was under fire for delivering ill-informed sales staff that were insufficiently equipped to engage effectively with customers. One by one, the entire contents of the retail marketer’s toolbox were going under the microscope as nervous campaign managers sought to pinpoint weak spots and shore up defences.

“Unprecedented conditions demand unprecedented action and while our retail marketers undoubtedly identified some real deep-set weaknesses in the promotional process early this year, when the game becomes one of survival strategic thinking is usually shadowed by base instinct. By summer 09, with footfall down nearly 20 per cent, deep discounting had, predictably, become the most common response to the panic conditions that ensued on the high street.

“In a trading environment now dominated by BOGOFs (Buy One Get One Free) and 241s (Two For One), discounts of up to 70 or even 80 per cent had become commonplace and, for six out of ten of the retail marketers in our group of 100, real concerns were emerging that price-based
promotions just couldn’t get any lower.

“Even more alarming: shoppers, they feared, had actually become de-sensitised to the big number price reductions that had kept so many stores trading in the depths of recession,” said Unneberg.

Mohive then looked at what might be in store for retail promotions in 2010. Having reached rock bottom on price, how do retail marketers bring the more sophisticated characteristics of choice, value and integrity back into the promotional process? New research from IGD Retail Analysis shows that more than one in four consumers now want to see the back of multi-buy promotions – viewed as promoters of waste rather than value – and are embracing a more eco-friendly agenda.

For example, P&G nappy brand Pampers has abandoned the classic BOGOF this year in favour of a rich promotional message designed for today’s more socially aware consumer. Pamper’s promise of ‘one pack = one vaccine’ recognises the consumer’s move away from excessive consumption and towards more complex, altruistic values. Similarly, Marks and Spencer has been promoting sustainability values this summer with striking marketing slogans, such as: ‘Fairtrade cotton: Look good on the outside, feel good on the inside’, or ‘We don’t sell poor quality meat. It comes at too high a price’.

Unneberg added: “If promotions are really to spark deep customer engagement in 2010, retailers need to be ready for the new wave of human interaction. In sharp contrast to the BOGOF or the multi-buy, these highly textured promotions can actually work to build brand equity, connect with customers and create long term loyalty. The complexities of the BOGOF may be addressed in one pithy point of sale card but satisfying the questions evoked by a promotion like Marks and Spencer’s requires a highly informed sales force expertly equipped to answer any number of enquiries about M&S’s position on sustainability, such as: ‘Is the entire M&S clothing range now Fairtrade?’, ‘If not then why not?’, ‘What else is going on at M&S to help the planet?’ and even ‘Does the 5p charged for a plastic bag these days help the environment too?’.

“Engaging questions like these will come to signal real success in a new era of retail promotions that focus on long term relationship building - but the key word here is ‘engaging’: Encouraging customers to ask interesting questions is only one half of a conversation. Properly equipping sales staff with the tools and know-how they need to respond convincingly whenever they are asked will ultimately seal the deal.”

Lars Unneberg, CEO Mohive, which is headquartered in Oslo, Norway.