It’s a given that consumers love sales, but they’re also a necessary part of doing business online beyond being a key driver for purchases. Whether it’s a sitewide sale or a special promotion where exclusions apply, a lot of thought goes into crafting a deal that benefits both the brand and its customers.
Let’s discuss some of the best strategies for your ecommerce sitewide sales and the best retail markdown and promotional strategies to maximize your profits.
Why Sales are Important?
Ecommerce storefronts carry costs of keeping products in inventory. Businesses can use markdown strategies and promotional cycles to lower costs while also driving revenue to move products off the shelves. They are especially important for fashion brands, where many of the products have a shorter shelf life—roughly a 2-3 month cycle—due to seasonality and style trends.
Sales are an excellent tool for moving merchandise quickly, but there is more to sales strategy than meets the eye. “When planning a sale, a brand first needs to figure out the end goal,” says Jeff Deisner, Nogin’s Chief Customer Officer. “Is the goal to drive people to the site to purchase a lot, drive top-line revenue numbers, manage a level of profitability on the storefront, or something else completely?”
That goal can help influence the decision on what kind of promotion to offer. Sitewide sales are the simplest to execute, but in many cases, exclusions make sense—perhaps they’re a better fit for the nature of the overall promotion, or perhaps brands want to avoid discounting an item they’ve already discounted.
Running a promotional sale on social media or a Google ads campaign is an excellent way to bring attractive leads through your ecommerce conversion funnel. Entice viewers by highlighting the sale, the minimal quantity, and specify it is a limited-time offer to drive urgency and scarcity. Both elements are essential to any product listing strategy or retail pricing strategy.
The Three Best Sales Promotion and Retail Markdown Strategies
There are three key concepts to keep in mind when formulating sales offers:
- How are brands promoting the product?
- How will brands reach out to customers to let them know about the promotion?
- What is the end goal for the product?
To help you answer these questions, use our three best sales promotion strategies to guide your efforts.
Listen to Your Audience
For pricing, Deisner says brands should study how their customers. For example, do a particular brand’s customers prefer sitewide sales, buy-one-get-one-free deals, gift-with-purchase promotions, or percentage- or dollar-based discounts? To determine what will work best, brands can leverage data on past purchases or examine larger industry trends. This is where it can be helpful for brands to partner with an ecommerce specialist. By integrating advanced ecommerce software, ecommerce businesses can access deeper insights into their customers’ buying habits to optimize their storefront for conversions and improved retention.
“We recently worked with a brand that traditionally ran percentage-based promotions, 30% or 40% off, and it was clear there was an uptick in consumer demand for those products,” Deisner says. “We’d seen success in other areas where we took a dollar amount off and tied it in with something like free shipping, and we wondered if it would have more of an impact for this brand. We alternated those promotions: one week, it would be a percentage off. The next, it would be a dollar amount. We ended up finding that the percentage off was much more enticing, especially if it was a sitewide sale. We made a sitewide sale with a small number of exclusions, so we didn’t discount already marked down products too significantly, and we messaged it the right way.”
Make Your Promotional Product the Star
In terms of messaging, brands should advertise their sales on their sites and mention any applicable exclusions. “Generally, we find that when a website makes it clear what product is being promoted, it’s a big contributing factor in driving conversion rates higher for the promotion,” Deisner says. “We leverage strikethrough pricing, which is a way to present the original price crossed out, with the sale price beside it. Customers can see the price difference and know it’s a good deal.”
A good sale announcement will spark a lot of interest right away, but brands will want to sustain that momentum. Emails can effectively communicate promotional offers to customers along with social ads and SMS texts. Brands can craft campaigns around them that run throughout the sale period. To reinforce a sense of urgency, brands may put time limits on promotions or advertise a limited stock of items on sale.
Partner With an Ecommerce Expert to Guide You
Sometimes sales get an overwhelming customer reaction with products flying off the shelves; other times, a promotion just may not be taking off. In either case, Nogin gets real-time results that help brands respond quickly, for instance, by ordering more inventory for sale or crafting different messaging to get the word out.
“There is no magic wand for brands to figure out how best to promote and sell their product,” Deisner says. “They will benefit from engaging a partner like us that can drive decisions based on past experience and understanding best practices, for the greatest likelihood of success.”