Feb 2019, by Julius Abendan
5 Examples of Tried and Tested Retail Sales Promotions
There’s a saying that goes, “Innovate. Do not imitate.”
In business, innovating on someone else’s idea is a good way to survive, especially in today’s fiercely competitive and highly innovative landscape. It wouldn’t hurt to look at what your competitors are doing, reverse engineer it, and give it a twist that you can call your own.
The saying applies well to promotions. Promotions are a retail outlet’s tool in advertising itself, and dragging in people who will ultimately become purchasers at the end of the day.
Question is - how can one effectively implement sales promotions? Understanding this will help foster creativity and innovation.
Fixed Price Discount Coupons
Fixed price discounts are more commonly used in online retail outlets. In Amazon, for instance, you can enter a discount coupon upon checkout and get a price cut from your total purchase. However, it doesn’t mean that it doesn’t work well with physical retail stores.
There is an ongoing debate on the merits of fixed discounts as compared to its counterpart, the percentage discounts. We’d say that the difference is in the psychological side - slashing off, say, $75 off a product that costs $500 can have more impact on your customers than a 25% discount.
That’s because the savings are more readily apparent with fixed price discounts, while a percentage discount on expensive products cannot quickly convey that benefit as customers will have to make some calculations first.
Percentage discounts have their own charm in the minds of consumers, as long as they are played right. Because we’ve discussed how fixed price discounts can have more impact in the section above, it’s time to look at how percentage discounts can be used to the hilt in retail promotions
According to PromotionCode.org’s Mike Catania, percentage discounts have seen much success when used in a store-wide context no matter what rate you offer. Going selective on your percentage discounts, on the other hand, tend to discourage buyers more easily.
The mindset is like, “Oh, they’re having a 5% discount off everything!” If they see a sign that says, “60% off on selected items,” they’d probably be discouraged as they’re uncertain which products they can actually discounts from.
Buy one, Get one
This bundle-based promotion is actually just a complex implementation of either fixed price or percentage discount schemes.
They typically take on the form of “Buy one, and get 5% off the second item,” or something like that. You can use these if you want to move old inventory, so you can make room for new stock. They need to be used a little more creatively than fixed and percentage discounts, however, as customers don’t usually find these attractive unless bundled uniquely.
You can also use the “Buy One, Get One Free” scheme if your profits can accommodate that.
Free Shipping… for a Minimum Purchase
Last but not the least, you can offer free shipping. This can work for both physical and online retail outlets.
The effects and usefulness of free shipping in online shopping is self-explanatory, but not so when it comes to offline retail. Take, for example, a huge purchase on an appliance or a piece of furniture that will need to be transported from your store to your customer’s home. What if they don’t have a car?
If you have an agreement with transport services in your area, you can leverage that and offer free shipping and transport for the customer. This can be tricky, however; you’d need to look at the cash flows that the offer can theoretically bring in and see if offering the service cannot put a dent on your profits.
How do you think you can improve on these five sales promotions so they can lure in better catch? Let us know in the comments below.