Savings in Printed Promotions: Smart Strategies for Retailers to Cut Costs

January 17, 2024
Rebecca Wine profile picture
Rebecca Wine

Explore cutting-edge strategies to reduce print costs. This article explores an innovative model tested with an Italian retailer, and provides actionable insights for crafting a cohesive strategy where sustainability and cost-efficiency meet retail innovation.

There is a growing global discourse that printed leaflets, and catalogs are unsustainable. As a result, countries like France and Canada have implemented restrictions on printed leaflets. These regulations seek to not only eliminate waste and promote sustainability, but to protect privacy, and improve the cleanliness of public spaces.

While these restrictions address environmental concerns and the end user, retailers too, are looking to reduce their print output as this cost increasingly eats a large portion of their marketing budget. However, figuring out how to strategically approach this can be a daunting task.

This article explores a scientific study that tested a model for reducing print in collaboration with a retail chain in Italy, and discusses takeaways for crafting a cohesive strategy for reducing print and its associated costs.

Case study and Numerical Analysis: Implications for a Spatial Distribution Strategy

In 2020, Beatrice Luceri, Fabrizio Laurini, and Sabrina Latusi from the Department of Economics and Management at University of Parma developed a model to inform where and how retailer’s should distribute their printed leaflets.

The purpose of the model was to optimize and maintain the impact of store leaflets despite a reduction in quantity. It does so by finding the best combination of factors to maximize its promotional goals, retaining existing customers and attracting new ones. It considers specific factors in the market area to avoid oversimplifying the decision-making process.

Unlike traditional methods that plan leaflet distribution at the store level, and based solely on local population density, this system accounts for the complex relationships between various influencing factors. This model attempts to fill in this gap with a more holistic approach to the distribution store leaflets. It helps retailers make decisions more aligned with marketing goals, and ensures a more effective and strategic distribution strategy.

About the development…

The proposed model was discussed with grocery retailers, to maintain alignment with their marketing-oriented approach. A leading retailer provided data for testing the model in a specific market area with two hypermarkets (large retail stores that combine the features of supermarkets and department stores, offering a wide range of products under one roof).

Benefits of using the model

This model offers retailers a flexible framework to support decision-making, allowing them to adapt their strategies to specific market environments. Retailers can choose to focus on customers or non-customers, enabling a tailored approach for retention or attraction. This flexibility accommodates changes in marketing dynamics and swift responses to competitor actions.

To put this in a real-world scenario, imagine a store planning to promote gardening in a leaflet alongside its usual grocery products. In one scenario, they want to sell more to existing customers, so they use a defensive approach in deciding where to distribute the leaflet. In another scenario, they aim to attract new customers, so they use an attacking approach. The model helps stores make these decisions realistically, considering factors often overlooked in actual management practices.

As retailers acknowledge the compatibility of paper leaflets alongside their digital counterparts, these managerial implications retain significance, supporting both targeted digital promotions and broader paper-based strategies. The model aligns with retailers' dual objectives, leveraging digital tools for precision and utilizing paper leaflets for wide-reaching impact, maintaining customer loyalty, and fostering brand awareness.

Main Takeaways for Retailers

When creating a strategy to reduce printed leaflets, it is important to consider the following:

Importance and Attractiveness: Gauge the influence and appeal of each market area, ensuring a balanced approach to leaflet distribution.

Spatial Dynamics: Consider the geographical proximity of stores to customer residences, maximizing impact in strategically chosen locations.

Customer-Centric Approach: Prioritize areas with a higher concentration of potential customers, while retaining a focus on existing clientele.

Competitive Landscape: Understand the competition within and outside similar stores. Place leaflets strategically to tackle both internal and external competition, making the market position stronger.

Adaptability Over Time: Continuously update the model with real-time data, allowing for agile adjustments to market conditions and business priorities.

How store flyers were spread out before and after using the optimization model

Wrapping up

In a global context where concerns about the sustainability of printed materials are gaining momentum, this approach could help retailers facing restrictions on printed leaflets, and help them proactively align with sustainable practices.

Furthermore, reducing print costs is a significant challenge faced by retailers with increasingly strained marketing budgets. By embracing a strategic approach to print reduction, retailers can not only reach sustainability goals but also achieve a harmonious balance between cost-effectiveness and promotional impact.

This model serves as a dynamic tool for retailers, aligning their leaflet distribution strategy with overarching business objectives and market realities. It empowers strategic decision-making, ensuring promotional efforts resonate effectively with the target audience.

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