Measuring Promotional Effectiveness in Your Liquor Store

March 8, 2018 In Latest News

When you run a promotion, how do you measure promotional effectiveness in your liquor store?

Do you look only at depletion reports to measure how successful the promotion was?

If so, we’re here to tell you looking only at the number of items sold misses a critical variable that makes measuring promotion effectiveness critical to business growth.

To better understand how effective a promotion is, you have to look not only at the immediate impact it has on sales, such as how many units were sold, but analyze how a promotion builds baskets, drives incremental foot traffic and establishes long-term impacts on sales.

Essentially, you want to use technology, data and consumer insights to uncover the quality of a promotion, not the quantity of product sold.

A number of things contribute to this holistic understanding of a promotion’s success, driven heavily by consumer insights.

  • Did the promotion bring in new customers?
  • Did customers return to your store for the promoted product later, potentially converted to a higher product category?
  • How did the promotion contribute to basket sizes?

Understanding these driving behaviors gives you the ability to replicate success going forward.

These four tenets can ground and guide you as you evaluate promotions.

1. Baselines

Did you sell more product in the promotional time period than during a normal time period? You can only answer this question if you know your baselines, or the usual sales numbers for products.
First, look at data for the item you’re promoting to see what drives day-to-day sales.

  • How often is it purchased?
  • Do you see spikes during certain times of the week, month, or year?
  • Is the item usually bought in conjunction with other items? Are those other items high or low margin?
  • Does this product drive regular, recurring sales from the same types of customers? Will these customers really be affected by a change in price?
  • Is it something people do (or might) buy in bulk to stock up on?

With your baselines set, you can fairly judge your promotion using sales data. Was there a lasting impact on sales? Did sales go up during the promotion and stay up after the promotion?

Seeing these key drivers in comparison to baseline sales helps you develop, evaluate and repeat the right promotions in the most effective way.

2. Customers.

Seeing who bought into your promotion once it has run its course is key to iterating successful sales going forward.

Did the item you promoted sell to a wider demographic than usual? That information could alert you to a deeper or growing trend within the category.

Did the promotion bring in new, valuable customers? With data delivered in near real-time, you can see which customers are new to your store, understand what brought them in and nourish the new relationships with follow-ups.

What else were customers buying to build their baskets? And what is the value of those items? If they are high value or high margin, pairing the items together can help you better position your products in-store going forward, and to drive other future promotions.

3. Profits

Did the promotion add to your profits? Depletion reports will show you how much product is sold, but if you moved 100 more units than usual at a significantly lower price, your profit will drop, leaving you in a worse place than before the promotion began. By understanding when to activate a promotion, and at what price, you’ll avoid discounting too much, which hurts profits, or not enough, which won’t drive value for customers.

Visibility into local market sales also helps you frame your promotions for the most valuable profit gain by showing what is trending in the region. If you see that promoting a product boosts sales and profits in your store, but notice that overall sales of that product in your area are down, you’ll gain better control over what value your store brings to the market.

Overall, basket analysis is again a valuable piece in understanding how a product drives profits. When you see the value of the basket rather than looking only at the individual items, you’ll better see how a promotion affects your bottom line. For example, knowing that customers buy a brand of wine on average 5 times a month, and fill their baskets with a top-shelf liquor in the same trip, you’ll promote the wine more often to bring back those valuable customers.

All of these ways of looking at profits help you formulate the right discount to drive sales without losses.

4. Goals

It’s important to establish what you want out of a promotion before you launch it. What are you hoping to achieve with this marketing choice? Whether your goals are to shrink margins on products driving incremental sales or clear out products that collect dust on your shelves, you’ll only know what to change if you set goals ahead of time.

As you evaluate your promotion in real-time, you can judge against your goals to measure its effectiveness. One common goal: Is running this promotion profitable to my business or not? Diving into different levels of data shows you what worked and what didn’t, and lets you see what factors need to change going forward. If a promotion drove sales but didn’t increase profits, for example, you know in the future that the discount was too steep, or that the specific item is not a driver of larger baskets.


Through these pillars of focus—and using new technology that seamlessly integrates with your store—you can more effectively measure your promotions. Each will give you a better definition of success for your store. Used all together, you can proactively (rather than reactively) maximize your promotional marketing and see big wins for your store.