Research Help: Determining If Retailer Will Do More Promos
I was hoping to get some advice on how to research this.
I’m looking into a specialty retailer & manufacturer and I’m trying to figure out if they will do more promos in the next year or so. So far they have avoided promos, but the environment is expected to get worse in 2024 so my initial assumption is that they will have to do more promos (they operate in a highly promotional industry). What are some ways to look into this?
My first thought was to check sell side SKU trackers, but it doesn’t appear that promos have started yet. Typically for something like this I might do channel checks with merchandisers at retailers that sell the target company’s products to get their outlook, but this company exclusively sells at their own stores.
What are some other things to look into?
Thanks in advance to anyone who responds.
Hey there! Based on the most helpful WSO content, here are a few suggestions you might consider:
Historical Data Analysis: Look at the company's past behavior in similar economic conditions. If they've increased promotions during previous downturns, they might do the same in 2024.
Competitor Analysis: Check out what their competitors are doing. If they're ramping up promotions, your target company might feel the pressure to do the same.
Management Commentary: Listen to earnings calls and read through company reports. Sometimes, the management might drop hints about their future strategies.
Customer Behavior: Understand the company's customer base. If they're price-sensitive, the company might have to increase promotions to keep them.
Industry Trends: Keep an eye on the overall industry trends. If the industry is moving towards more promotions, it's likely your target company will follow suit.
Remember, while these methods can provide some insights, they're not foolproof. The decision to increase promotions will ultimately depend on the company's strategy and market conditions. So, keep your bananas peeled for any signs of change!
Sources: What is with these “Promotions” at Private shops?, Is retail like we know it dead?, Thoughts on Restructuring Groups?
A good channel check for these sorts of things:
- Speak with a major competitor (ideally private)
- Ask suppliers
- Veteran from the space who may have recently left the industry or lateraled to an adjacent business
Would be surprised to see a real uptick in LULU promotion, don’t worry
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