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Five insights from leading eCommerce experts on how to optimize your promotional strategies and avoid the discounting trap in 2023.
Our latest webinar explored the ever-changing eCommerce landscape and how to effectively optimize your promotions for 2023. Our panel of experts provided insights into the latest trends and shared their tips on boosting engagement, making sales, and avoiding the discounting trap.
Our panellists included:
- Andy Mulcahy, Strategy and Insight Director at IMRG
- Nishant Khanduja, Head of Digital Products at Solo Brands
- Rosie Bailey, CEO and co-Founder at Nibble
You can watch the full webinar here, or read our five top insights below.
#1 Don’t panic over dwindling Add-to-Basket rates
Andy Mulcahy pointed out that Add-to-Basket rates have seen a significant downturn in recent years – dropping nearly 25% from past figures. Analyzing multiple retailers, IMRG observed average Add-to-Basket rates of 10-20% in previous years. Now, since the economic difficulties in early 2022, the average Add-to-Basket rate has dropped to a peak of just 15%.
This trend shows a general hesitancy among shoppers to click the ‘Add to Basket’ button. However, Mulcahy advises retailers not to hastily hit the ‘discount’ button in an attempt to boost these rates. Given the state of the economy, even the most enticing discounts may not significantly improve Add-to-Basket rates. Instead, you need to focus on what you can offer besides a (too) generous discount.
Which brings us on to…
#2 Leverage your brand values
People love buying from brands they resonate with. Emphasizing your brand values at the right moment can hugely reduce your dependence on discounting. As consumers become more discerning, they are more attracted to brands that reflect their own values and principles. So when your brand resonates with customers and highlights what it uniquely offers more than simply a low price, they’ll want to support you.
Nibble’s newest feature, optionally powered by generative AI, makes highlighting your brand values at the perfect moment easier than ever. You can learn how to do this by reading our blog post.
#3 Gamify your shopping experience
Nishant Khanduja brought up the power of gamification in driving customer engagement. By incorporating even the faintest element of gamification, you’re encouraging purchases because of the experience you deliver versus any particular price or discount you are offering. Even the most serious of brands can benefit from offering some kind of gamification – shopping is supposed to feel fun and rewarding.
We see the power of gamification first-hand at Nibble. Engaging chats like the real example pictured below show how much customers can enjoy the experience when you make shopping interactive. It goes beyond simple fun – these chats have improved conversion and AOV for Nibble retailers by 50%, and given retailers 27%+ in margin savings compared to traditional discounting.
You can read more about our results for retailers here.
#4 Timing doesn’t make or break your Black Friday campaign
IMRG had fascinating insights to share on Black Friday, based on their data from 2022, looking at how close to or far from the start of Black Friday retailers launched their campaigns.
Surprisingly, timing didn’t make any significant difference – they all got the same share of sales in Black Friday week. So don’t get too hung up on the details of these big shopping holidays – there isn’t necessarily a ‘perfect’ launch time. It’s the quality of your offer, the resonance with your audience, and the shopping experience you provide that will really make the difference.
It is also worth noting that consumer price sensitivity across the Black Friday period does not change as much as you would think. Our data insights on consumer reactions to retailers' pricing—revealed monthly on our Table Talk webinars—showed a less than 1% increase from Oct '22 to Nov '22 in the number of consumer chat comments that mentioned price comparisons, costs being too high or similar.
For our next set of monthly insights, sign up for next month's Table Talk.
#5 Considering context in promotions
Andy Mulcahy’s secret tip was to consider all external influences, even something as seemingly unrelated as the weather, when evaluating promotional performance. You’d be amazed how much external influences like the weather—or the state of the economy—can impact your promotions’ success. Think about it: if it’s an unusually warm winter, fewer shoppers might be tempted to buy that stylish new winter coat you’ve heavily discounted. On a larger scale, an economic downturn might make consumers cautious about discretionary spending, regardless of how attractive a promotion is.
Things entirely out of your control can determine the success your promotions have, and failure to record context means you could miss otherwise obvious trends.
Summary
Optimizing your eCommerce promotions isn’t just about offering the biggest discount or launching campaigns at the “right” time. It involves understanding your audience, leveraging your brand values, making the shopping experience enjoyable, and considering all contextual factors.
Things like lower Add-to-Basket rates can easily instil a sense of panic and encourage you to hit the button on a big red sale banner promising every customer 20% off – but stay calm, consider external influences, and think about how you can offer promotions that deliver a holistic shopping experience not based solely on the discount you offer. The end goal of your promotion isn’t just to get customers to click ‘Add to Basket’. It’s to build enduring relationships that keep them coming back.
What next?
For real insights on how consumer expectations match up to promotions in the eCommerce industry, don't miss our next regular session of Nibble Table Talks, where we share behind the scenes data your business needs to know.
Or, check out Nibble's newest feature with generative AI integration – Brand Value Statements deliver the message your customer needs to hear at the exact moment they need to hear it to make the purchase.
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