A sale run by hand adds a third risk, which is our reading and not a source’s figure: the hours it runs outside its plan, and prices that are never put back. Each of those hours is margin given away.
The headline figure
20-50% of promotions generate no noticeable lift in sales, in BCG’s work with retailers. BCG: “20 to 50 percent of promotions generate no noticeable lift in sales—or, worse, have a negative impact. Another 20 to 30 percent dilute margins in that they don’t generate an increase in sales sufficient to offset promotion costs.”
It is a study of brick-and-mortar retailers (supermarkets, discounters, drugstores, mass merchandisers), not small online stores.
The figure as a chart, with its source
Consulting firmBCG, “Improve Promotion Effectiveness” (opens the source)Sources
Research on this pain point
- 18.7%more volume to offset a 5% price cut, McKinsey foundDiscount timing and depth: what McKinsey, Bain and Deloitte found
- 20–50%of promotions showed no noticeable lift, in BCG’s workHow many promotions pay back? What BCG, McKinsey and Bain found
How SalePilot works on it
SalePilot schedules a sale with a start and an end; the end time is enforced and every price goes back, with a report of what reverted. Free plan available.
See SalePilotSalePilot Smart Sale Scheduler on the Shopify App Store
What we checked
Each figure is read in the source’s own text. None of them is a result of our apps.
- SourceBCG, “How Retailers Can Improve Promotion Effectiveness”, full text (PDF)Open on web-assets.bcg.com (opens the source)