Four strategies relied on by leading ecommerce experts to make their promotion strategies more effective, more supportive of their brand and more in-tune with customer needs
This webinar had our highest turnout of all time. Clearly the ecommerce market - where competition has never been fiercer - is seeing promotions as a key route to drive conversions.
But it's not that simple. For many, there are concerns that the wrong promotional strategies can trigger a race to the bottom, damage brand or over-sacrifice margins.
So how should a promotional strategy be built?
Below, we have distilled our four key takeaways from our session (or you can watch the whole recording here), which featured expert guest speakers:
- Janis Thomas, eCommerce & Marketing Director at Look Fabulous Forever
- Annabelle Semler-Collery, Chief of Operations and Development at VIEVE
- Plus, Rosie Bailey, CEO and co-Founder at Nibble
Our four top takeaways:
#1 Discounting does not have to be transactional, and The Power of Free
Annabelle at VIEVE revealed a fascinating strategy: their promotion strategy is not about promotions!
Instead of securing and retaining customers with transactional promotions and discounts, they are focusing on adding value for their customer, and by extension adding value to their brand. So while other beauty brands may offer WELCOME10 discount codes, VIEVE will offer early access to products, free masterclasses, and invitations to VIP events with their founder, Jamie Genevieve, on whom so much of the VIEVE brand is built.
All of which are offered for free.
The Power of Free is a well known tactic in negotiations. Human nature, perhaps counter-intuitively, is to over-value anything offered for free. So when in a negotiation, something is included in a deal "for free", it often has more impact than a financial discount.
We have built The Power of Free into Nibble's negotiation tactics. Retailers can use offers such as free shipping, free gifts with purchase or extra loyalty points to counter consumers' low bids, and keep the final deal value as high as possible.
#2 Align your promotions with your brand purpose
This is something that we at Nibble believe in whole-heartedly.
Many retailers fear discounting of any description. It can be seen as setting dangerous precedents, off-brand, or worse, cheapening it.
But in fact, discounting strategies can be built more smartly. Discounting can be used to emphasise brand values.
For VIEVE, this is about making sure that every promotion - whether transactional or free - harks back to brand objectives and strategy, and in many cases, back to Jamie Genevieve herself.
For others, promotions may need to reflect quality, exclusivity or sustainability. This is such an imperative that we have even incorporated it into how we built Nibble.
Retailers can tell Nibble their brand values, so that Nibble can use them in its conversations to support offers and counter-offers. For example, countering a visitor's low offer by reinforcing that the product is high-quality, selling fast or even a unique one-off item.
We consistently find that retailers that tie their discounting strategy to their brand strategy, and ask Nibble to reinforce their key brand messages in the negotiation chat, manage to drive higher deals and higher conversion rates.
#3 Step One: Traffic. Step Two: Bundles and AOV
For Janis at Look Fabulous Forever, the priority is simple: get the consumer to the website.
LFF has observed that offering high spend thresholds in exchange for a free gift is losing its impact and attraction. Too often, consumers believe they wouldn’t ever spend that much.
But if the threshold is lowered, meaning more click-through onto the website, many visitors will actually spend more than the original high threshold.
This focus on traffic and Conversion Rate Optimisation, rather than large initial discounts and promotions, is widespread in ecommerce. Nibble can support such strategies by only being triggered, or "unlocked", if a basket size has reached a certain value or number of items. For some retailers using Nibble to drive average order value (AOV), we have seen 40-50% uplift in purchased basket value compared to without Nibble.
#4 Your 2022 customer is not the same as your 2023 customer
In a year of such uncertainty, you will most likely find that consumers just aren’t able to afford as much, or meet the thresholds for discounts that they were before.
Up to the minute pricing insights therefore become vital. Not just insights into pricing tolerances across the wider market, but specifically insights on how your customers are perceiving your products and prices.
Nibble is so much more than an AI negotiation chatbot. It also builds a unique dataset on your visitors' real-time reactions to your pricing, right at the point-of-sale, giving you pricing insights that are simply not available anywhere else.
Nibble records every conversation - the path taken to every deal, and every failed negotiation. It also interprets the comments your users make to unveil their underlying motivations, concerns or intents. This data can then be made available to help you build the perfect pricing and discounting strategies, and adjust them as the market evolves and the dataset changes.
The battle to secure conversions is raging fiercer than ever. Price sensitivity, barriers to digital advertising/personalization and the ease with which new competitors can arise all create a highly competitive market. Discounting strategies are one way to overcome all these problems, and others.
But they have to be smart strategies.
These top four takeaways will protect any online retailer's discounting strategy from putting their brand at risk, make them more commercially effective and ensure that the offer matches the market's need.
And Nibble is the perfect tool to support.
For more content on negotiation, then check out Mastering everyday negotiation: Nibble on the Retail Transformation Show, where we dig further into the behavioural science behind negotiation and Nibble and provide practical advice for your next real-world negotiation.
Or check out our top tips blog.
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