Types of Retailer’s promotions and how to implement them in business (Retail Strategy 10.05.2021)

Types of Retailer’s promotions and how to implement them in business

 

1. Percentage and amount discounts

Discounting products may be the most popular type of sales promotion. Everyone loves a bargain, so it makes sense to offer sales discounts when you want to gain attention.

Retailer can offer a percentage discount, such as “20% off,” or offer amount deals, such as “Rs. 5 off.” Promotional pricing can extend storewide, or it can apply only to certain products. Storewide attracts the most, but it’s important to do what works for retailer.

 

Tips for implementing:

Use sparingly: Always consider your bottom line. Remember that sales discounts should feel like a special occasion, not something people come to expect as the norm.

 

Choose a discount that will sound attractive to consumers: Generally, percentage discounts perform better, even if the amount deal has more significant savings. With expensive items, attractive discounts such as “Rs. 50 off” sometimes convert better. Your most attractive promotional offer depends on perceived value, your price points, and your target audience.

 

2. BOGO

In retail terminology, BOGO means Buy One, Get One. You may sometimes see the acronym BOGOF for Buy One, Get One Free. Similarly, some retailers offer buy one, get one half off deals.

These offers attract customers because they cut down on shopping guilt. People feel more comfortable spending money when they secure a deal they wouldn’t normally get. For prospects hesitating to make a purchase, BOGO deals can attract them in the right direction.

 

Tips for implementing:

Use to clear inventory: Like discounts, BOGO promotions should be implemented sparingly. Often, retailers use BOGO promotions to move inventory. So, if you’re looking to clear out some of your stock, BOGO is a solid option.

Offer a deal that will convert: Buy one, get one half off might sound tempting, but BOGO deals typically convert better. Buy one, get a percentage off deals often frustrate consumers because the deal applies to the less expensive item. Shoppers look for cheaper items for these deals, which leads to lower revenue.

 

3. Product or coupon giveaways

Think about sending virtual coupons to first-time shoppers or customers who spend a certain amount of money with you. When someone receives a coupon in their inbox, it feels more exclusive and encourages them to return to your store.

 

You can even use targeted marketing to cross-sell products based on a customer’s purchase history. For example, a customer who purchases a new swimsuit could receive a coupon for 5% off on beach towels.

You may also want to host product giveaways or contests. Entry to giveaways may require purchasing a product, filling out a form that includes an email address, or liking and sharing your brand on social media.

If coupon and product giveaways don’t appeal to you, consider sending branded gifts with purchases over a certain amount. Examples include pens, magnets, and keychains, preferably with a cute image or clever saying that your audience will appreciate.

Plus, branded gifts will remind your customers of your brand and can even spark conversations about your store with others.

 

Tips for implementing:

Consider your goals: Do you want to prioritize retaining loyal customers? Go with coupons or branded gifts.

Are you interested in building brand awareness and increasing your social media following? Host a giveaway on social media.

Need to bulk up your email list? Require email addresses on your giveaway entry form. Make sure entrants know you’re adding them to your email list. Better yet, allow them to opt in to the promotional emails they want to receive.

 

Think about your target audience: Choose giveaways that will excite your target audience and get them talking. If you’re not sure, use a survey or a poll to ask existing customers what type of product giveaway they’d like to see.

 

Promote: If you want your giveaway to make a splash, promote it across marketing channels. Send emails, post frequently on your social media, and even make a landing page on your website. If you run a brick-and-mortar store, hang flyers in your store or place them in customers’ bags.

 

4. Loyalty points

Loyalty programs are a great investment because they increase customer retention and maximize their lifetime value to your company.

With loyalty points, customers earn points each time they shop with you. They earn discounts, free items, or perks such as free shipping when they reach a certain number of points.

Some retailers also award points for actions such as social sharing, writing reviews, and referring other customers.

 

Tips for implementing:

Start small: You want customers to feel your reward system is worthwhile, but you don’t want to give out excessive points and lose money. Depending on your price point and average order amount, start with something small, like one point per Rs. 25 spent. After tracking sales and points metrics, adjust as needed.

 

Make your rules and options clear: Clearly explain how customers can redeem their points. Explicitly state how points can and can’t be used. Will your points last indefinitely, or will they eventually expire? What loopholes should you close to avoid customers gaming your system? Whatever you decide, keep it simple and convenient for a stellar customer experience.

 

Use existing tools: Depending on the retail software you use, you’ll find several tools to add a loyalty program to your online store.

 

5. Seasonal offers

Seasonal promotions convey urgency because they’re available for a limited time only. Think about special products like dress materials for special occasions.

Often, seasonal promotions relate to important events in your customers’ lives, such as purchasing a gift for Mother’s Day or preparing their children to go back to school.

 

Tips for implementing:

Check out the competition: Are your competitors promoting seasonal offers? What are they doing well, and what are they doing poorly? How can you offer something different and better? Evaluating competing offers is always a helpful exercise, even if you can’t incorporate these ideas until next year.

 

Get creative: You don’t have to run your seasonal promotions with everyone else. Think about your niche. If you sell cleaning products, for example, hold a spring-cleaning sale. Do you sell flowers or plants? Launch an Earth Day promotion. Or do something more creative than your average seasonal sale, such as offering complimentary gift. Discount products like books, games, or home decor are perfect for at-home getaways.

 

Optimize your homepage: Besides promoting your offering on all marketing channels, optimize your site’s homepage. Use seasonal colors and imagery, and add call-to-action buttons.

 

6. Collaborations

Partner with another local brand or business to leverage one another’s reach and resources. Collaborations often lead to unique promotions that generate a lot of interest.

For example, co-host a giveaway or offer an innovative product bundle in each of your retail stores.

Another idea is to provide a coupon to your partner store when customers shop with you, and vice versa.

 

Tips for implementing:

Identify a complementary brand for your partnership: You don’t want to work with a direct competitor, but you do want to collaborate with a brand with a similar audience. Use your knowledge of your target audience to choose a brand with some overlap.

 

Promote on both of your websites and marketing channels: Maximize the opportunity to connect with another brand’s audience. As part of your collaboration, agree on how you will both cross-promote via your social media accounts, email lists, and websites.