E-commerce companies choose to run promotional campaigns and offer discounts for a variety of reasons. Some of the benefits that can be achieved when properly executing a promotional campaign include:. While discounts and promotions can be beneficial for e-commerce businesses, they can also present some challenges:.

To mitigate these challenges, particularly profit margin concerns, and capitalise on all the possible benefits, businesses need to use strategic promotion management and follow best practices for optimising their pricing strategies.

What does good promotion management look like? No matter if you are a retailer, brand, D2C, or marketplace, it starts with making targeted pricing decisions d epending on the market you are operating in: Are your categories and articles seasonal?

Are your customers price-sensitive? Do you have overstock? Consumer behaviour is, of course, impacted by psychology, and it plays a significant role in the world of e-commerce discounts and promotions. Understanding the psychological aspects of pricing can help businesses to ensure they choose the right promotional strategies for their target audience.

One well-known example of this is price elasticity : as price increases, demand falls. This is the foundation of why businesses offer discounts in the first place — because according to price elasticity, decreasing the price increases demand. However, this is not always the case, and it is good to know the price sensitivity of each product.

Another psychological factor at play is around behavioural economics and how consumers view different types of savings. With dynamic pricing tools and systems like Omnia Retail, users can integrate multiple internal data sources such as season, stock level, contribution margin, distribution channel, and compare data to competitors to calculate the optimal prices.

Easily apply unique discounts to different assortments and product groups. E-commerce discounts: Types, benefits, and how to use them Author: Lauren Detweiler Editor: Maren Ritzheim March 23, Table of contents:. An overview of discounts and promotions No matter what you call it — discount, offer, promotion, coupon, Rabat Dutch or Rabatt German — what we are discussing here is giving customers a chance to get an offered product cheaper or with an additional benefit.

Typical discount models Discounts and promotions come in many different forms, from monetary savings to freebies to rewards, and it's important for businesses to understand the various options available to them.

Here are some of the most common types used in e-commerce: Percentage off : This is a straightforward discount that offers customers a percentage off the price of an item or order. Free shipping : Many customers are deterred by shipping costs, so offering free shipping can be a powerful incentive to buy.

Businesses might offer free shipping for orders over a certain amount, or for a limited time. Buy one get one free BOGO : This promotion encourages customers to buy more than they originally intended. Bundle or bulk discounts: Some products will be packaged in bundles, allowing customers to get a discount on what they would have paid for each item separately.

Other times, discounts will be offered for bulk orders e. buying a case of wine vs. one bottle. Loyalty rewards: Some businesses offer loyalty rewards programs to incentivize customers to purchase more frequently.

They may offer special discounts or promotions that are only available to loyalty members, for example, free shipping with Amazon Prime or Zalando Plus. Examples of typical promotional events or campaigns Usually, e-commerce businesses have a reason behind their promotional campaigns, whether it be timing-related such as holidays, product-related like a new product launch, or something else: Timely discounts Time-based or seasonal promotions like Black Friday, Cyber Monday, winter holidays, and back-to-school season are common reasons for discounts to run.

One example is this time-based discount for Black Friday from fashion brand Steve Madden : New products or clearance Brands may use offers to promote a new product launch, or use discounts to sell off a current item if a new or updated product will be launched soon.

Beauty retailer Sephora has a loyalty program called Beauty Insider that uses a points system and exclusive benefits to reward customers: Benefits and challenges of using discounts and offers in e-commerce Benefits of e-commerce promotions E-commerce companies choose to run promotional campaigns and offer discounts for a variety of reasons.

Some of the benefits that can be achieved when properly executing a promotional campaign include: Attracting new customers: Offering enticing deals can reach new potential buyers and encourage them to try out a product or service.

Driving sales: Promotional campaigns can stimulate sales, particularly during periods when demand might be low. Increasing online conversions : Boosting conversions can be one of the biggest benefits of online offers. Encouraging repeat purchases: Offers can give a boost to customer loyalty, as customers may be more likely to return to a business that offers ongoing deals and rewards.

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Online shopping discounts - Use RetailMeNot to find the best online & in-store coupons & promo codes to save on retail, travel, food & more! Save up to 70% on s of local restaurants, shopping, events & more. Find great deals on the best activities & things to do Sign up today to shop over 3, stores using coupons, promo codes or cash back with Rakuten! 1. Set a budget and make a shopping list · 2. Shop at the right time · 3. Apply coupons · 4. Compare (and match) prices · 5

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carolin Köhler. buying a case of wine vs. one bottle. Loyalty rewards: Some businesses offer loyalty rewards programs to incentivize customers to purchase more frequently. They may offer special discounts or promotions that are only available to loyalty members, for example, free shipping with Amazon Prime or Zalando Plus.

Examples of typical promotional events or campaigns Usually, e-commerce businesses have a reason behind their promotional campaigns, whether it be timing-related such as holidays, product-related like a new product launch, or something else: Timely discounts Time-based or seasonal promotions like Black Friday, Cyber Monday, winter holidays, and back-to-school season are common reasons for discounts to run.

One example is this time-based discount for Black Friday from fashion brand Steve Madden : New products or clearance Brands may use offers to promote a new product launch, or use discounts to sell off a current item if a new or updated product will be launched soon.

Beauty retailer Sephora has a loyalty program called Beauty Insider that uses a points system and exclusive benefits to reward customers: Benefits and challenges of using discounts and offers in e-commerce Benefits of e-commerce promotions E-commerce companies choose to run promotional campaigns and offer discounts for a variety of reasons.

Some of the benefits that can be achieved when properly executing a promotional campaign include: Attracting new customers: Offering enticing deals can reach new potential buyers and encourage them to try out a product or service. Driving sales: Promotional campaigns can stimulate sales, particularly during periods when demand might be low.

Increasing online conversions : Boosting conversions can be one of the biggest benefits of online offers. Encouraging repeat purchases: Offers can give a boost to customer loyalty, as customers may be more likely to return to a business that offers ongoing deals and rewards.

Common challenges when using discounts and promotions While discounts and promotions can be beneficial for e-commerce businesses, they can also present some challenges: Eroding profit margins: Businesses may find that discounts erode their profit margins, particularly if they offer too many promotions too frequently.

Changing expectations: If they are not careful, businesses may have issues with what consumers expect. They may firstly train customers to only buy when there is a discount, which can be problematic if customers start to expect discounts all the time; or secondly, desensitise consumers to the offers so they are no longer effective.

Best practices for optimising pricing strategies To mitigate these challenges, particularly profit margin concerns, and capitalise on all the possible benefits, businesses need to use strategic promotion management and follow best practices for optimising their pricing strategies.

What can a brand or retailer do to create promotional programs without sacrificing profit margins? Motivate a repeat purchase : Offer a coupon after the transaction, or give a discount if they become a newsletter subscriber so you can keep in touch. Use a loyalty program: Encourage customers to join your loyalty program rather than just offering one-time coupons.

Offer tiered coupons: Instead of a flat percentage discount, encourage customers to spend more to save more by tiering coupons. Incentivise customers to make referrals: Ask shoppers to refer new potential buyers in order to receive their discount. Offer subscriptions : Subscription or membership-based programs capitalise on customer loyalty and can give you recurring revenue.

Have a reason — Giving consumers a reason for the sale or discount — whether that be a holiday, product launch, or new loyalty program — can keep expectations in check and avoid customers demanding those prices year-round.

The role of psychology in promotional pricing Consumer behaviour is, of course, impacted by psychology, and it plays a significant role in the world of e-commerce discounts and promotions.

How to use dynamic pricing tools for promotional pricing With dynamic pricing tools and systems like Omnia Retail, users can integrate multiple internal data sources such as season, stock level, contribution margin, distribution channel, and compare data to competitors to calculate the optimal prices.

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this alluring beige-brown hue adds a touch of sophistication to your nails, while its Made with nourishing hemp and acai, it soothes and revitalizes your lips for a hea With its twist and scrub design, you no longer need cotton balls or t Give your beloved cat the best with Whiskas With Tuna Dry Cat Food!

Give your dog the complete and balanced nutrition they deserve with Pedigree Chicken In Jelly Food Pouches. Made with high quality proteins and nat Indulge your feline friend with Whiskas With Chicken Dry Cat Food!

This high-quality formula boasts a delicious blend of carrots and peas, while ba These low-fat chew sticks combine a tough outer layer with These chewy, low-fat treats have a succulent center and to With a tough outer and succulent centre, these low-fat treat Indulge your dog's taste buds with Pedigree Schmackos Multi Mix Dog Treats.

Made with mouth-watering flavours of beef, lamb, and poultry, these sof Indulge your feline friend with Catisfactions Ox Flavour Cat Treats. Made with real beef, these crunchy and soft treats will have your cat begging Always Happy to Help Get in touch with our friendly team.

Original price £ Current price £5.

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