During festive periods, it is common for online stores to offer specific discounts as a form of celebration and also to get more sales. As an online store owner looking to offer festive discounts to online shoppers, it is vital that you plan carefully to prevent losing out on your profits. An eCommerce festive discount is a reduction in price, and in such a situation, it is elementary for you to go below your margin. Yes! You will gain lots of online shoppers; however, you may not make any profit after the discount period.
In this post, we will show you how to offer eCommerce festive discounts without touching your margins. But before we proceed, let’s show you the benefits of offering eCommerce festive discounts.
Benefits Of Offering eCommerce Festive Discounts
Offering festive discounts brings several benefits to your online store. Most importantly, such discounts help attract online shoppers, both new and old.
According to Statista, about 54 percent of online shoppers between the ages of 18 to 29 prioritizes discounts before making an online purchase. Additionally, 34 percent of shoppers of 60 years and above also agree with the discount views.
Conversely, an eCommerce festive discount facilitates an influx of new online shoppers, which results in improved sales for online stores.
By implementing eCommerce festive discounts, you can meet your daily, weekly, monthly, or yearly sales goals. If your products are of good quality, then your brand becomes more exposed, and it boosts your reputation.
Also, discounts can be an ideal way of getting rid of old stocks and freeing up space in your warehouse. If you have items with a low purchase rate, a festive discount sale will help you sell such items off so you can bring in new items. In a nutshell, inventory management becomes easier.
Now, let’s check out how you can offer eCommerce festive discounts without losing out on your profits.
How To Offer Ecommerce Festive Discounts Without Touching Your Margins
1. Bundled Discounts
You can group items that are related together and sell them off at bundled discounts. This method is ideal for offering a discount on more than one item. That way, you get to sell more with the discount rate reduced as it is shared among the items.
You can group as many items as you want, but to make it rational, you should group about 5 to 10 items. The deal will be more interesting if the items are related, for instance, a shirt with a trouser, tie, jacket, and more.
Measure the sales of each product and fix a discount amount in which you are bound to make a profit.
2. Percentage of Discounts
The percentage of discounts is ideal for offering festive discounts. For such a method, you should fix a percentage off when online shoppers purchase a particular number of items or items up to a certain amount.
For instance, you can offer a 5 percent discount for a shopping cart worth $500 and above or a 5 percent discount when up to 5 items are purchased.
Fortunately, discounts with higher percentages will be more attractive during festive periods. Also, you can offer a discount for an unnoticed product.
To avoid touching your margins, do your calculations to know which percentage off is ideal for the festive period. A 5 percent or 10 percent eCommerce festive discount offer may not affect your profit margins if the related amount is high, but to your online shoppers, it is a good offer.
3. BOGO — Buy One, Get One Free
This is a popular discount method that you can use to get rid of old stocks. When a product is purchased, the buyer gets 1 free product.
To make this BOGO discount strategy work, you can significantly increase the product price to cover up for the profits. That way, the cost of a single product should still generate profit for you even when you offer an additional free item.
Besides, your online shoppers will be getting the two items for the price of one; hence, you will entice online shoppers with your offer irrespective of your competitors’ pricing.
Alternatively, you can attach a smaller low-cost item as a gift when a higher-cost item is purchased. For instance, if you own an online apparel store, you can offer a buy shirt and trousers, and get a free shoe promo.
Conversely, the aim is to attach a free product whose cost will be covered by the profits of the higher-cost item.
4. Free Shipping
Free shipping is an ideal method to attract online shoppers to your online store without touching your margins.
During festive periods, when online shoppers purchase items and meet a specific requirement, you can offer them a free shipping discount.
According to a NRF Study, many online shoppers prefer free shipping to percentage and fixed price discounts.
Conversely, there are different free shipping techniques you can apply to ensure that you make profits during festive periods. It could be free shipping for a fixed time, for items worth high amounts of money, for buying a particular item, or when they register/subscribe to your newsletter. That way, you benefit immensely without adversely affecting your online store income.
How to Stay Profitable
As you offer festive discounts on your online store, your utmost priority should be to increase your profitability.
To stay profitable, you should properly plan your discount strategy with special consideration of your profit margins. You should not offer unreasonable discounts just because you want to increase sales.
A product may be of more need in a particular area than another; in such a location, online shoppers will be eager to purchase items at any offered discounts.
Therefore, you should geo-target your discounts. In fact, your online store should not display the same eCommerce festive discounts to everyone.
Nevertheless, you should ensure that your online store is accessible on mobile devices. About 53 percent of mobile internet users will leave a website that loads for more than 3 seconds.
That implies that if your online store website does not load fast enough, you may lose prospective customers which will lower your profits.
As an online store owner, offering festive discounts is an easy way to join in with the festive celebration. Not to mention, online shoppers during festive periods are more than willing to make a purchase.
Although offering eCommerce festive discounts are beneficial to your online store; however, it is essential that you observe your margins.
By applying any of the different approaches listed above, you will be able to achieve your aim for profitability without touching your margins.