By Scott Fulton, VP, Retail Analytics, Circana, and Scott Love, SVP, CPG Analytics, Circana
Pricing and promotion are two of the most powerful tools in marketing. Retailers have used these tools for decades to influence consumer decisions, build loyalty, and protect or improve their market share.
In today’s competitive omnichannel marketplace, retailers can execute their pricing and promotional calendars flawlessly and still lose ground. Particularly in an operating environment with ongoing macroeconomic headwinds, winning baskets come from someone else, and losing baskets to a competitor who likely moved faster.
Traditional retail pricing and promotional playbooks, built on a few familiar metrics and a bit of instinct, don’t take into account the differences in the modern marketplace that impact efficacy. For example, consumers now carry a price-comparison device in their pockets or on their wrists. A shopper standing in an aisle can check a competitor's price on their phone or smartwatch and order the same item for same-day delivery before they reach the register, whether that’s a stick of butter or a bigger-ticket item. Additionally, a “hot ad” that once turned around a bad trend has lost some of its power, and some retailers are finding that better everyday pricing does more for share than another round of temporary price reductions.
Given such dynamics, long-held assumptions are risky. Sales can climb, but share might quietly slip. A promotion can lift volume this week and erode profit and loyalty for months.
Separating true performance from noise
In this competitive, ever-evolving environment, even trusted metrics can prove misleading. To gain a true picture of pricing and promotion effectiveness, retailers can use insights to see what’s really landing with their customers and how it impacts the bottom line.
What is true performance?
True performance is a retailer’s standing relative to the market, not just its own numbers in isolation. It answers a sharper question: Are you capturing a larger slice of demand, or simply riding a category that happens to be growing?
Share is the piece of the puzzle that ties everything together. A retailer can post healthy comparable-store numbers and strong loyalty statistics while competitors quietly pull shoppers away. True performance separates a business’s momentum from the movement of the market.
The pitfalls of relying on noise
Surface-level metrics create a comfortable but perhaps false sense of winning. Solid identical-store sales, rising loyalty enrollment, and steady traffic feel like proof that a strategy is working, but those metrics only describe activity inside a store’s four walls. The numbers don’t reveal whether a retailer is gaining or losing relative to everyone else.
There are three common pitfalls of looking at just surface information:
Mistaking growth for share gain. Sales can rise in a category while share falls, because the category grew faster than you did.
Stopping at correlation. Ad hoc analysis can show that two things moved together, but it rarely proves that one caused the other. Acting on correlation alone means guessing.
Viewing share through a single channel. A channel-only lens is increasingly outdated. A retailer can win share in a channel that is shrinking and still be edged out in the broader fight.
The lesson is that noise tells you what happened to your sales. It does not tell you why, and it does not tell you whether you are actually winning.
The Need for a Holistic View
While powerful and proven tools, pricing and promotions strategies fall within a broader group of factors that push and pull on share at the same time.
To understand any share change, retailers must assess the full spectrum of forces:
Price: Everyday and relative pricing position against competitors.
Promotion: The depth, frequency, and real return of promotional activity.
Assortment: What a store carries, including private label.
Availability: Whether the right products are on the shelf when shoppers want them.
Shopper behavior: How and where people buy, and what they are willing to switch for.
External forces: Macroeconomic pressures, channel shifts, and "share of stomach," where a $100 grocery basket competes with a $150 night of restaurant and takeout spending.
Looking at any one of these in isolation gives only half the picture. Distinguishing the levers you can pull from the forces around you turns a reaction into a strategy.
Act on the Right Levers with Circana’s Market Share Drivers Solution
If there are many levers, what are the right ones to pull? Circana’s new Market Share Drivers solution allows retailers to determine where and why their share moved and whether their pricing and promotions are helping or hurting.
This innovative, statistically-modeled solution identifies, at the category and geography level, whether pricing and promotions are acting as a tailwind or a headwind to market share. An evolution in Circana’s retail-led design solutions, Market Share Drivers adapts automatically to a retailer’s unique scope and geographic needs by seamlessly integrating Circana’s most powerful solutions, Complete Market® and Complete Consumer™, with macroeconomic and weather data, plus OOS benchmarking.
Think of it as the difference between a paper map and GPS. A map shows you the terrain and leaves you to plot the route yourself. GPS pinpoints exactly where to go and recalculates as conditions change. When share is everything and competitors move in days rather than quarters, that level of guidance changes how confidently you can act.
Learn more and request a demo: Market Share Drivers | Retail Analytics | Circana
