Each type of retail promotion serves a different purpose. For this reason, instead of choosing a type of promotion and then finding a way for it to meet your objectives, this should be done in reverse. Plan each with set objectives in mind.
First, identify your aims. Are you looking to make space for new inventory? Is increased foot traffic your main objective? Is boosting the bottom line most important? Once you know your objective, it is time to find a promotion which will achieve this.
Do your research. Which promotions have proven successful nearby? Which have benefited you most in the past? What are competitors doing? It can even be worthwhile asking customers what they feel holds the most value for them.
Types of retail promotion
Once you have determined your objectives, the next step is to decide on the perfect promotion. Each comes with its own benefits, so take the time to understand each before implementing it.
Commonly used, the “10% off” or “50% off” approach is one of the most popular, regularly seen instore and online.
Whether it’s applied across the entire store or on specific ranges, the percentage off deal is a fantastic way to encourage footfall and sales.
Chief Technology Officer at PromotionCode.org, Mike Catania, said: “We’ve tracked coupon and offer usage over tens of millions of promotions for the past nine years, so we have a solid understanding of what types of deal convert the best. Hands-down, the most popular style offer is n% off anything.”
Set price discounts
Set price discount promotions, such as “£20 off” instantly capture the attention of shoppers.
Particularly successful when applied on higher priced items, this technique can outperform other types of retail promotion. When used on more expensive products, set price discounts make benefits easier to understand than percentage discounts, for example.
Depending on the products for sale, “2 for the price of 1” offers can help to move stock.
A multi-buy promotion will clear inventory, but does not work on all items. When applied on commodities or ranges, such as food or watch straps, consumers jump at the opportunity to get a second product. On the other hand, a “2 ovens for the price of 1” deal may not be as successful.
Bear your stock in mind when deciding if this is the best option.
In ecommerce, offering free shipping can entice potential customers to buy.
Making it a limited time offer encourages a fast purchase. Customers are also likely to spend additional money, justifying it as what they would have otherwise spent on shipping.
BOGO (Buy one get one) promotions
‘Buy one get one’ offers, also known as a BOGO, are regularly used to move inventory or old stock which is no longer required.
The ‘BOGO free’ approach works brilliantly to increase the number of items being sold, adding additional value for customers when products are relevant.
Beware of frustrating customers with ‘BOGO half-price’ promotions, as this can deter higher price sales due to it always being the lower cost item which is reduced in price.
Conditional promotions encourage spending to receive benefits, prompting customers to buy more than they may have done otherwise. Examples of this include “spend and get other items discounted”, “free shipping on orders over £50” or “buy to gain loyalty points.”
One of the additional benefits of a conditional promotion is that it does not damage revenue as much as others, and encourages shoppers to view all items on offer, rather than only those which are discounted.
Create urgency – Making an end date for every promotion is important, tempting customers to make a quick decision. Advertise the time left or even have countdowns to remind customers that the promotion won’t last forever.
Make a theme – Create memorable promotions by tying them into themes. Celebrate public holidays, national days or even specific days of the week, making it clear why there is a promotion in place.