Holiday Promotions: Are Your Discounts Driving Growth?
As the fall holiday shopping season approaches, CPG brands and retailers are preparing for one of the busiest promotional periods of the year. Halloween treats, seasonal food and beverage purchases, and Black Friday deals all create opportunities to influence shopper behavior and increase sales.
But with more promotions competing for attention and consumers facing competing demands on their budgets, there’s an important question to ask: Are your holiday promotions generating incremental growth, or simply discounting purchases that would have happened anyway?
A sales spike during a seasonal promotion may look like success. Yet shoppers might be switching from a competing brand, stocking up earlier than planned or buying at a discount what they would otherwise have purchased at full price.
Understanding the difference is essential to measuring holiday promotional effectiveness and making smarter investment decisions.
A holiday sales spike doesn’t tell the whole story
Imagine a CPG brand launches a Thanksgiving meal promotion or discounts a popular product ahead of Black Friday. Sales jump 30% during the campaign.
That’s encouraging—but what drove the increase?
Some shoppers may have purchased the product for the first time. Others may have switched from a competitor. Existing customers might have stocked up to take advantage of the deal, leaving them less likely to purchase again in the following weeks.
Meanwhile, the discount reduces revenue per unit across qualifying purchases, including those that would have occurred without the offer.
The real measure of success isn’t simply how much sales increased during the promotion. It’s how much additional business the promotion generated, at what cost and with what lasting impact.
Four questions to ask before the next holiday promotion
1. Are we creating incremental demand?
Holiday occasions naturally increase demand for many categories. Shoppers buy candy for Halloween, ingredients for Christmas meals and gifts during the Black Friday period.
That makes it especially important to distinguish seasonal demand from the additional demand a promotion creates.
Did the offer encourage shoppers to buy more than they otherwise would? Did it attract new buyers, increase category purchases or persuade consumers to choose your product for a holiday occasion?
Comparing promotional sales with an appropriate baseline can help estimate incremental volume. However, the analysis needs to account for seasonality, distribution changes, competitor offers and other factors affecting demand.
The objective is to determine whether the promotion genuinely changed purchasing behavior—not simply whether sales were high.
2. Did we win new buyers or subsidize existing ones?
A holiday offer can encourage shoppers to try a new brand, switch from a competitor or purchase a familiar product at a lower price.
These outcomes have different implications for long-term growth.
Winning new buyers may create opportunities for repeat purchasing after the holiday season. Discounting purchases from existing customers, however, may sacrifice margin without meaningfully changing their behavior.
Consider a seasonal product bundle. Did it attract households that wouldn’t normally buy the brand, or did loyal customers simply purchase the bundle instead of their usual products?
Understanding who responds to a promotion—and what they would otherwise have purchased—helps brands distinguish genuine buyer acquisition from subsidized sales.
3. Are we shifting purchases rather than increasing them?
Stock-up behavior is particularly relevant during the holiday season. Shoppers may buy larger quantities when they see a compelling multi-buy offer or expect prices to rise.
This can create an impressive short-term sales lift, followed by a decline when those shoppers use up their purchases.
For example, a household that buys several packs of a product during a Black Friday promotion may not need to purchase it again for weeks.
Evaluating performance only during the promotional period can therefore overstate the impact.
Brands should examine sales before, during and after the offer to determine whether demand was genuinely added or merely brought forward.
4. Are the returns worth the investment?
Even when holiday promotions generate incremental volume, they don’t automatically generate incremental profit.
Discounts reduce revenue per unit, while retailer funding, advertising and execution costs can further affect returns.
The question is whether the additional business and any longer-term benefits justify the total investment.
A promotion that attracts new buyers who return at regular prices may offer more value than a deeper discount that generates a large but temporary sales spike.
For CPG and retail teams, evaluating both sales and profitability provides a stronger basis for deciding which promotional mechanics deserve investment in future seasons.
Understanding the shopper behind the sale
Sales data reveals what happened, but it doesn’t always explain why shoppers responded.
Was the discount the deciding factor? Did the product fit a specific holiday occasion? Did a bundle simplify meal planning or gifting? Did the offer persuade shoppers to switch brands, or did it simply reinforce an existing purchase?
Shopper research can help answer these questions by examining how consumers respond to different offers, messages and purchase situations.
Explorer Research uses shopper research and behavioral measurement to help brands understand decision-making in realistic shopping environments. Testing promotional concepts before launch can help identify which offers are most likely to influence choice, encourage trial and communicate value.
Combining these insights with sales and profitability data gives brands a more complete picture of promotional performance.
Make this holiday season count
The fall holiday period presents significant opportunities for CPG brands and retailers—but it also brings intense competition for shopper spending.
Before committing to the next seasonal campaign, ask:
Are we generating incremental demand or subsidizing existing purchases?
Which shoppers are responding, and what would they otherwise buy?
Will the offer encourage repeat purchasing after the holidays?
Are we measuring performance beyond the promotional period?
Does the incremental business justify the investment?
The goal isn’t to run more promotions or offer deeper discounts. It’s to understand which promotional strategies genuinely influence shopper behavior and deliver profitable growth.
The best holiday promotions don’t just win the week. They create value that extends beyond the season.
Planning your next holiday promotion?
Explorer Research helps CPG brands and retailers understand what drives shopper decisions and evaluate opportunities to improve performance. Our shopper research can help you investigate responses to promotional concepts, identify barriers to purchase and make more informed decisions about future campaigns.
Contact Explorer Research to explore how shopper insights can help you make smarter promotional decisions and get more value from your holiday investment.
