E-Commerce Link: Valued Promotions
It’s February. Winter still has us in its grip and apparently, so does the economic downturn. Fortunately, there are specific things online retailers can do to mitigate its effects. The other good news is that growth in the online channel still outpaces brick-and-mortar. This year brings significant challenges for online retailers including higher expectations from online shoppers, limited resources with which to drive sales and the need to build customer loyalty in the face of increased competition. Consumers also look to spend less, yet they still expect stellar experiences online.
This means that two priorities have superseded all others: (1) meeting customer demand for real value and lower prices, and (2) maintaining sales and revenue momentum. While these goals may seem diametrically opposed, it’s possible to satisfy customers’ needs while still setting yourself up for success in the uncertain mood of 2009.
Tactic No. 1: Free Shipping
Forrester Research’s October study, Outlook for U.S. Online Holiday Sales, 2008, reports that 75 percent of shoppers say they’re more likely to shop at a site that offers free shipping. You need to choose a free shipping model that your particular customers respond to. Be careful to weigh the cost of free or discounted shipping against increased order size. Some estimates indicate you need to increase sales by 30 percent to cover the free shipping cost.
- Product- or category-specific: Tie free shipping to a limited selection of products or product categories.
- Free shipping category: Create an entirely new category for free shipping, and place it in the site navigation.
- Dollar amount threshold: Apply free shipping automatically once the amount in the cart exceeds a certain point. Promote this actively throughout the site and in the cart.
- Site-to-store: Put a spin on the “purchase online, pick up at a store” technique by promoting it as a free shipping opportunity. The buyer has the convenience of shopping online, and the cost of shipping from warehouse to store is cheaper for the merchant.
- Tied to branded credit card: When someone makes a purchase with your store-branded card, provide free shipping.
Tactic No. 2: Value Without Price Cuts
Customers want to find good things in the sale/clearance section, reduced prices and affordable package deals. In many cases, it is not necessary to actually reduce your prices at all. It may be sufficient to emphasize value by highlighting products already in your inventory that carry lower prices.