In the light of COVID-19 we want to help retailers, whether they are new to running discounts or already running, make every dollar count while discounting. Traditional e-commerce discounting is apparently doing retailers more harm than good. Discounting is already an industry-wide challenge and a glaring weakness of marketers, many of whom are used to recklessly discounting without a sound strategy. Now and going forward from COVID-19 – discounting ought to be done smarter and wisely. If you aren’t exactly sure why, when, where, how, and what to run, with respect to discounts, it will eventually eat up your net profits and ROI. Every transaction that utilizes discounts, takes away your precious profit and margin. The amount of transactions driven is ineffective, if the overall goal is driving ROI on discounts. Blindly discounting without measuring, assuming it will help sales uplift, is akin to bodybuilding by blindly eating and assuming it will build your body without giving regard to the amount of nutrition in it.
Common forms of discounts are doing retailers more harm
52% of retail promotions are generating little to no incremental sales*. Over-discounting is causing margin erosion.
With e-commerce spearheading the next phase of the shopping revolution due to the potential it offers to compare and scout for prices, reaching out and marketing discounts to the ever-growing digitally savvy shoppers – especially the millennials and GenZers who are more frugal and price conscious than any of the other generations – has become more important than ever.
But there is a problem
There is a sharp disconnect between consumers and retailers in terms of pricing and discounts. According to a Forrester Consulting study, 57 per cent of customers want competitive prices and discounts. Without a proper discounting strategy, either the retailers and brands are going to suffer in terms of profitability and ROI or the customers are more likely to churn and brand loyalty – damaged.
The market conditions are also very competitive with Amazon and discount retailers who have gained significant ground recently. Even Apple started to run discounts in 2019 finally. Additionally half of global luxury buyers want to buy only when discounts are available(according to YouGov).
More and more, it looks like discounting is inevitable – if not imminent and is the need of the hour. While many retailers who aren’t discounting risk falling into the hands of hotshot competitors, retailers that currently are discounting are also unsure of how to run properly, wasting huge and unnecessary marketing dollars. Plus this is on top of the discounts pushed to their buyers. 52 per cent of retailers’ promotions go to shoppers who would’ve happily paid full price – discounts that are generating little to no incremental sales (merchandise that’ll sell even if not promoted).
The margin and profit deterioration, which although is not evident straight away, can be devastating and damaging in the long run. It’s time brands realize they need to make inroads into data-driven strategic discounting. A proper discounting model is paramount for brands to survive and thrive in today’s competitive retail market.
The good news is discounts aren’t always high-risk, if used effectively. Although there is no one solution that fits all, a well-defined multi-channel discounting strategy that assesses pain points across the sales funnel aligning with business goals can assist retailers by not only helping drive additional conversions, overbuy and ROI, but also avoid unwanted discounts and margin erosion.
$70 cost (inc overheads & expenses )
HOW WE CAN HELP
With over 12 years of experience in digital discounts and coupons marketing since the very early days of online shopping, we are able to help retailers and brands to maximize and make the most of the power of discounts using effective strategies, best practices and recommendations to tackle well known industry problems due to discounting.
We have driven
Katt Srinivasan: CEO
Katt is a digital and ecommerce entrepreneur, and the founder of Adavenue Media Pty Ltd. and Bargain Avenue, Australia’s leading discounts and coupons website. Katt is a veteran performance marketer, who has been working in the discounting and couponing performance marketing industry for around 12 years, helping drive hundreds of millions in sales for retail partners and millions of dollars in savings for shoppers.
Having seen first-hand how some retailers were burning dollars while running discounts and coupons, Katt now wants to fuel his mission and sense of purpose by putting to use all of his extensive experience by helping brands run highly strategic, measurable, attributable and profitable discount marketing campaigns – especially now and going forward from COVID-19, when discounting needs to be done smarter and wisely.
Bargain Avenue was finalist for Rakuten Marketing Awards 2017 and was featured on Money Magazine Australia. It was also featured on TV for Channel 7 prime news for a segment on reputable bargain websites (with our case study). He regularly authors articles and has contributed for various publications such as The CEO Magazine, Smart Company StartupSmart, Power Retail, Inside Small Business, Anthill Magazine etc. and interviewed for Yahoo News and News.com.au. He is an ex-Apple employee and a Masters of Technology graduate from RMIT University.
He also runs a podcast titled “Starting from Nothing”.
Besides, he is currently writing a book on ecommerce discounting which he expects to launch by the end of the year.
If you like to learn more about Katt’s thoughts and motivations, you can connect with him on the LinkedIn below.
FREE 30 Minute Consultation and FREE Discount Optimization Guide
Whether you are new to running discounts or already running, our team is happy to help you establish a optimized discounting model for your business and also the most effective ways to distribute and market your discounts and coupons. During the free phone consultation you will have an opportunity to tell us about your current challenges you are facing with respect to discounting, your goals and any other specific questions you may have. After the phone call, we will follow up with a FREE discount optimization and strategy guide, that formulates a set of strategic actionable recommendations which you can use to unlock immediate cost savings up to thousands in wasted dollars and hundreds of thousands over time, quickly close sales, increase incremental conversions and drive immediate ROI on discounts. Our quickly actionable yet powerful discounting strategies and recommendations will offer immediate benefits for retailers to implement an optimal discount operating model or clean up their current discounting system.
If you are facing any challenges with respect to discounting, or have any other specific questions, please contact us below and our team will be happy to help.