Promotions are always part of a retailer’s sales and marketing mix, and for good reason — they can drive sales and help you move inventory.

But running promos isn’t as simple as slashing prices or putting up a “SALE” sign on your window. To get the most out of them, you need to consider the type of promotions to offer as well as how to execute them.

And that’s precisely what I will talk about in this post. I will be shedding light on the ins and outs of promos and listing the most common types of sales promotions.

What are sales promotions?

A sales promotion is a marketing tactic used by retailers to drive sales. It involves offering customers a deal that would enable them to either purchase a product for a lower price (e.g., €5 off) OR get more value of the sale (e.g., Buy One Get One Free (BOGOF)).

There are many types of promotions, which I will discuss in more detail below.

Percentage discounts

The percentage off deal (e.g. 20% off or 50% off) is one of the most popular — and effective — types of promotions. Should you run the promotions as 50% off your clearance or run 5% store-wide (with the few exceptions). The 5% store-wide will garner more attention and drive more sales. Since your clearance stock wasn’t selling anyway.

Percentage discounts are also the easiest to profit-test. If net profit doesn’t hold for a 20% discount, you can move to a 15% and still sell more then if you offered a flat amount like €5 off


Buy One Get One (BOGO) is another common one. This promotion can be applied in several ways: There’s buy one get one free, buy one get the 2nd item % off, buy one get one for 1c, etc.

BOGO is typically used to move inventory, so if you’re sitting on a lot of stock that you want to clear out, this promotion could be a good option.


Multi-buy promotions (i.e., “2 for the price of 1”) is another good option if you want to clear your inventory. But the success of multi-buys largely depends on the types of products you sell.

When considering a multiples-type promotion, first consider whether the product is normally used as a set or is a near-commodity,
like socks or wine. There, multiples discounts can work. Otherwise, they don’t.

For example, “Buy 2 Get 1 Free Bottle of Wine” is a winner. “Buy 2 Get One Free Ottoman?” Not going to move much.”

€xx off

An alternative to “percent-off” deals, this promotion involves discounting items by a flat euro amount (e.g., €5 off or €20 off).

It’s difficult to tell whether this offer is better than percentage discounts, as studies and tests have shown mixed results.

Let’s say your product is something fairly inexpensive, it regularly sells for €25 for a bottle that contains a one-month supply.
An offer for 40% off would do much better than an offer of $10 off, even though the actual value of the two offers is equivalent. Where for a more expensive product, something that normally sells for €450, I would predict that an offer of €60 off would do better than an offer of 15% off – even though the 15% offer is actually better. The €60 offer sounds like a substantial amount of money. And for most people, figuring what 15% of €450 is may seem like too much work.

If you’re on the fence between a percentage or a dollar amount discount, I recommend that you do the math AND look at your promotion from a psychological standpoint so you can figure out the best type to implement.

Multi-save and Conditional

Multi-save promotions include offerings like:

  • Buy and save off the entire sale.
  • Buy and save off specific items.
  • Spend and save off specific items.
  • Buy and pay a fixed price.

Conditional promotions, on the other hand, include:

  • Buy and get one or more items for free or on discount.
  • Buy and earn loyalty.
  • Spend and earn loyalty.

These types of promotions encourage sales without necessarily killing your revenues or basket values. They also encourage customers to check out more products, versus just looking at what’s on clearance.

How to decide on the correct promotion

Be crystal clear with your objectives

Start by identifying your objectives. Do you want to increase foot traffic? Boost your bottom line? Are you trying to make room for new inventory? The answer will help you decide on the right promotion.

If you want to draw people into your store, for example, then an attractive discount might be the way to go. On the other hand, if your goal is to move inventory, then you should look into BOGO or multi-buy promotions.

Test and Compare

Another way to figure out which promo is the best? Test different types to see what works best for your store. Set up cycles (a 5 week period), get your base line and record the figures run your first promotion and after the cycle compare your reports, then run for the next cycle and repeat. When comparing the reports make sure to be clear on your objectives. For instance there is no point have more foot-fall if your overall margin has dropped to nothing


Use a solid retail platform to implement your promotions. Promotions may bring about a large wave of sales, and you need to be able to implement your offers smoothly while tracking your transactions and inventory with ease.

You can’t do that well if you’re using a manual or cumbersome system. So, arm your store with a retail management system that enables you to run promos with ease.

See to it that the platform makes it easy to apply discounts and that your stock levels and sales are tracked effortlessly on the backend.

Leave a Comment