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Promotions - Part 1: Working on Promotions in ecommerce

Monday February 1, 2016 | By Dan Hawkins


Promotions have been a key device for encouraging additional sales over the decades, so how can multi channel ecommerce retailers in this ultra-competitive ecommerce marketplace use them to achieve their target levels of growth?

With promotions, you're trying to create an emotion in customers that moves them in your favour. From awareness of the offer to interest, where they engage with the offer, decision where they elect to buy and finally action where they follow through on a purchase. There are three main goals of promotion. The first goal is to attract new customers with enticing offers. The second is to build average order value by encouraging buyers to take additional products with their order. The third is to increase customer loyalty by inspiring buyers to make repeat purchases over time. This enhances their customer ‘lifetime value’.

In order to achieve these three aims, there is a host of promotion options for the ecommerce retailer. Of course, the main challenges for retailers are to find the time to stay on top of promotional activities and to decide on which promotions to use. Our ecommerce experts over at Volo HQ have detailed out the best ones...

 

Complimentary Items

Related items encourage a buyer who has already selected an item to add another complementary item to their order. This might be a case for a camera or laptop, the other two books in the trilogy, or perhaps an accessory for a clothing outfit. This has the effect of increasing the order size and attaching additional sales at little or no extra cost. Kits and bundles are a great way to communicate value and great service to buyers by packaging up products in ways that make sense to them, while also increasing average order value.

 

Discounts

Discounts are a good way of increasing order value. When a buyer’s order value has reached a certain minimum threshold, they are entitled to a certain discount that you specify. For example, if a customer has spent $47 and they see they get 10% off all orders over $50, it’s an easy step to add something small to avail of the discount and possibly pay less than the subtotal of $47.

 

Buy one, get one free

The ‘buy one, get one free’ incentive is designed to make the first item more attractive by getting another one free or perhaps 50% off. Again, this makes it easier to move additional numbers of a certain product that needs to be relatively high margin in order to make it profitable for the retailer to make the offer.

 

Free Shipping

Offering free shipping on items is another promotional tactic. This encourages buyers to either complete their order or add more items to the order to take advantage of the saving on transportation costs.  This is especially useful for low value purchases where the shipping cost might be as much or more than the price of the product. Again, the margins need to be sufficient on the product for the offer to make good business sense.

 

Pricing

A key promotional tool in the competitive battle to drive sales growth is pricing. Showing the original price compared with the offer price, using the ‘strike-through’ mechanism is a proven way of to grow sales. That said, it’s very difficult to manually monitor all your prices across the various channels you sell through. In this way, technology comes to the rescue through rules-based re-pricing engines which can automate this important weapon for you.

 

To learn more about how to use promotions in multi channel ecommerce, visit our Promotion Lever page.