Ecommerce Sales & Discounting: Dos & Don’ts

Here is the writeup of the #EcomChat session on “Sales & Discounting”, written up by @JackSaville1. It was another very busy session, with input from lots of hands-on Ecommerce managers, directors, and others.

There were 3 conversation starter questions, and anyone was welcome to chip in live on Twitter using the #EcomChat hashtag. Here were the questions:

1. What are your top tips for launching & maximising ecommerce sale periods?
2. How can retailers avoid becoming ‘permanent discount’ shops?
3. What are the pros & cons of  putting discount ranges on separate sites/sub-sites? e.g. The Outnet

The first topic of the hour was

Q1. “What are your top tips for launching & maximising ecommerce sale periods?”

To start off, a practical tip: Place time limits on a sale.

• @aattias: @ecomchat Q1: Time constrain them. Once launched an ecom ‘happy hour’ with steep discounts lasting 1 hr & results were phenomenal #ecomchat
•  ‏@MontseCano: @aattias @ecomchat From a user’s pov, it sometimes is hard to find those offers, as many shops, etc. #ecomchat

There was a great deal of chatter about the issue of sales and old stock that is not in demand.

• @KevinWaugh: A1: #ecomchat Put things that have demand on sale. The dusty crap on the shelf is not going to sell if no 1 wants it. Simple but overlooked.
• @danbarker: @KevinWaugh A very good answer. What should people do with the dusty crap on the shelf? #ecomchat
• @aattias: @danbarker @KevinWaugh Certainly NOT try to pass it off as ‘bestseller’ stock as I once did as a newbie many yrs ago #ecomchat

Many methods were proposed to try and sell old unwanted stock.

• @emmabonar: @danbarker @KevinWaugh Move the dusty crap to a private sales site, keeps your site premium #ecomchat
• @danbarker: @emmabonar @KevinWaugh lots offer the dusty stuff at very, very low prices to staff. I like that idea. #ecomchat

Another way of getting rid of old stock was to sell it as exactly that.

• @aattias: @danbarker @emmabonar @KevinWaugh I like the idea of having a category called ‘the dusty shelf’ – honest, transparent & memorable. #ecomchat
• @MontseCano: @aattias @danbarker @emmabonar @KevinWaugh Interested to see how a e-tailer would sell that. #ecomchat
• @aattias: @MontseCano @danbarker @emmabonar @KevinWaugh One way could be via a ‘make us an offer’ button #ecomchat

One way was to make use of ebay

• ‏@ChinaShopBull: @aattias branded ebay outlet? #ecomchat
• ‏@aattias: @ChinaShopBull perhaps for some brands but for others does eBay still have a damaging reputation? #ecomchat
• @john_w_hayes: @aattias @ChinaShopBull eBay good enough for Superdry, Dyson, Vodafone, Tesco, Argos, if you discount it – I think you are missing out
• @ChinaShopBull: @john_w_hayes @aattias even @mcmillanstu lot have an outlet I think?? Not sure how eBay is damaging to a brand if you serve the customers?

One way was through a ‘mystery box’

• @willdymott: In the gift category mystery boxes of bargain stuff is a good way to clear dusty stuff, mix good and dusty stock make it genuine #ecomchat
• @emmabonar: @willdymott ASOS sometimes put free gifts (from dusty stock) in orders as a surprise for the feel good factor #ecomchat

Alternative methods suggested were through a game style format.

• @ProjectOcto: #ecomchat Just had an idea to get rid of old stock. Raffle it off? Custs buy tickets to win a prize. Would that work online?
• @MontseCano: @ProjectOcto I’m thinking, using an interactive game on their site to help with matters? #ecomchat
• @ProjectOcto: @MontseCano To choose their ticket, maybe to win a ticket/prize – I’m liking it
• @MontseCano: @ProjectOcto A small video or graphics once the ticket has been chosen or some effects when pressing a button. Excited now! #ecomchat
• @mcmillanstu: @ProjectOcto @MontseCano how about a price countdown, longer you leave it cheaper it gets but you might miss it #ecomchat
• @mcmillanstu: @ProjectOcto @MontseCano you could run it a bit like this: https://adsoftheworld.com/media/ambient/meat_pack_hijack … #ecomchat
• @ChinaShopBull: @mcmillanstu @projectocto @MontseCano Late Rooms do a Twitter based countdown deal don’t they? Seems to dive lots of tweets and interest

Or, if the unwanted stock is likely to improve with age, then it might be better to just wait.

• @aattias: dusty shelf stock often = aged, hard to find products. If vol limited, might be better to hold it back & sell at a premium later? #ecomchat
• @KevinWaugh: @aattias If the demand is seasonal, then definitely, if there never seems to be demand, then I am not sure.
• @aattias: @KevinWaugh item value & product type both key too of course. #ecomchat

The next issue discussed was making sure that you have an idea of the demand you are likely to create from the sale, and to therefore be ready to deal with that demand.

• @mcmillanstu: don’t do it unless you have to, keep inventory tight #EcomChat
• ‏@mcmillanstu: @danbarker although I still think there is something to be said for having sale events, for share of customer mind #ecomchat

Another reason to have an idea of the demand effect of the sale is to not fall foul of the Advertising Standards Agency.

• @AndrewGirdwood: Make sure you estimate demand and supply and can prove you tried. Otherwise it’s an ASA foul! #EcomChat
• @LordManley: @AndrewGirdwood Surely that is wording dependant – limited stock offers are fine. #ecomchat
• @AndrewGirdwood: @LordManley Yes, but the claim doesn’t make you bulletproof if people complain about the sale. #EcomChat
• ‏@LordManley: @AndrewGirdwood “Last few going cheap” I think it is ASAproof (Assuming they are actually cheap). #ecomchat
• ‏@AndrewGirdwood: @LordManley Yeah – but banners saying “75% off. Limited availability” when you’ve only got one at that discount aren’t allowed.

Target members with the sale:

• @emmabonar: @aattias @ecomchat Sale previews for members / VIPs work well too #ecomchat
• ‏@aattias: @emmabonar @ecomchat Good point, make them feel special/privileged #ecomchat

Get bloggers involved in the sale:

• ‏@AndrewGirdwood: Tell some trusted, helpful and savvy bloggers in advance. Get some quotes. Turn it into outreach and endorsement #EcomChat
• @MontseCano: @AndrewGirdwood Offer them an incentive to keep the relationship. #ecomchat
• @AndrewGirdwood: @MontseCano Yes; this is whether affiliate management and outreach really starts to overlap too… #EcomChat
  

The role of testing in the sale:

• @danroche27: A/B Testing the sales messaging beforehand is wise e.g. 10% Off, £ Off, Free Delivery etc
  

Eventually, the goal would be to have personalized targeting of each customer and so the promotion of stock according to their need:

•  ‏@mcmillanstu :the dream is one-2-one targeting of stock and customer, personalised promo of terminal stock to increase lifetime value #ecomchat
• ‏@emmabonar :@mcmillanstu Not to mention personalised pricing… #ecomchat
• @mcmillanstu : @emmabonar you might be able to discount less if they have higher propensity to buy #ecomchat

Finally to round off the topic, there were a host of other useful tips to make a sale a success.

• ‏@Milsom: Make your offer as simple as possible – 10% off has to mean that and no exceptions #ecomchat
• @danbarker I still see brands forget to update their Google+ profile at sale launch. Easy way to get a big Sale image directly on brand SERP. #ecomchat
• @mcmillanstu: it’s good to think about short delivery promotions at this time, for example launching sale on a Thurs with free next day shipping #ecomchat

• ‏@danbarker: If you *must* have a sale that lasts a long time, holding back things for “More items added” updates is useful. #ecomchat
• @danbarker: I do like it when I see sale emails where they’ve updated the images to show what’s sold out. #ecomchat
• ‏@schurli666: @danbarker #ecomchat (fashion) make sure that 1st page of products are available in the most common sizes (1/2)
• @dkoblintz: different markets react to sales *very* differently eg in Japan tend to leave purchase decision to v last opportunity #ecomchat
• @Milsom: tip from travel – advertise live pricing ( of you can) to prevent customer frustration on variably priced goods #Ecomchat

The second question asked in the hour was:

Q2: How can retailers avoid becoming ‘permanent discount’ shops? Or avoid customers holding off buying until discounted?

Firstly, reasons where given as to why it is important that you are not seen as a discount retailer

• ‏@danroche27 : Once perceived as a “discount” retailer it is near impossible to change that, I will not buy Dominos without a voucher #ecomchat
• @MontseCano : @danroche27 A bit like Easyjet, although no low prices anymore. #ecomchat
• @danroche27 : @MontseCano exactly and when you try and change your brand image you dissapoint your existing customers #ecomchat

Adding value can stop the ‘permanent discount’ label

• @so_on : A2: #ecomchat There always is some place online with discounts. have to add value on customer experience side and develop relationship
• @danroche27 : A2) Provide more than just a product at a cheap price. Provide an excellent service (not just during sale). #ecomchat
• @welshmike : Offer added values services, like ‘Net-a-porter’ delivery experience, make it more than just price #ecomchat
•  ‏@aattias : @ecomchat to echo others, adopt a JL style ‘never knowingly undersold’ mantra but make it more than just about price #ecomchat
• @mcmillanstu : @aattias @ecomchat JL’s price promise makes it sound like customer service. genius. #ecomchat

Or, you could stay premium by moving old stock by an external site:

• ‏@emmabonar: @ecomchat Use 3rd party sites (ebay, private sales) to shift old stock and keep your site premium outside of markdown #ecomchat
• ‏@danbarker: @emmabonar @ecomchat agreed. ‘Premium’ sale sites like Cocosa/SecretSales/Vente Privee good for keeping them somewhat

One option would be to try and encourage the customer to interpret the sale as a bargain.  As suggested by @LordManley : Jack Wills and Boden are excellent examples of regular sales which do not suggest discounts, but rather bargains. #ecomchat

 

And to draw the second topic to a close, general tips to fight the ‘permanent discount’ label were offered.

• @mcmillanstu : @danbarker have systems that help you control stock buy-in based on business levels, stock vs sales is where it’s at #ecomchat
• ‏@MetricsMate: @ecomchat A2. Stop sending discounts to those who have abandoned their carts. Use an alternative solution such as Real Time.
• ‏@AndrewGirdwood: Chase a loyalty strategy rather than a discount strategy. Use a sale to reinforce loyalty benefits. #EcomChat
• ‏@Milsom : @danbarker #Ecomchat A2 Closed user groups to promote discounts saves the greater brand image
• @danbarker : Another way to avoid being seen as a discounter: run different subbrands. Supermarket Basics vs Finest lines the obvious example. #ecomchat
• ‏@KevinWaugh :A2: #ecomchat build demand long term (SEO, Social), strengthen relationship (email, loyalty)

And finally, ecomchat turned its attention to the final question, as stated by @danbarker :

Q3: What are the pros & cons of putting discounts on separate sites, or selling via other channels? (eg. TheOutNet/private sales)

Advantages of selling via other channels/separate sites:

• @aattias : pros: potentially easier to segment discrete audiences
• @ChinaShopBull : @danbarker Pro: Keep it on site in a clear area and make sure links are redirected to a useful place to soak up link-juice after. #ecomchat
• @willdymott : q3 Pro, keeps your ‘main’ site free
• @SEONorth : @danbarker Pro: avoid brand value dilution.

Disadvantages of selling via other channels/separate sites:

•  ‏@AndrewGirdwood : Q3. The wrong roll of the dice and Google might decide to enforce their “no duplicate serving” policy on PPC ads on you #EcomChat
• @mcmillanstu : I know the main reason Vente-Privee make you log in is to stop them being indexed by search engines #ecomchat
• @KevinWaugh : A3: #ecomchat cons: Customers may want to buy directly form you, and may not buy form a third party site.
• @welshmike : #ecomchat Cons: no control on when the sale happens, 3rd party could buy stock today and sell in 6 months time
• @aattias: cons: additional costs with the extra site or channels #ecomchat
• @willdymott: , cons: if you don’t keep the proposition clean & seperate you can cannibalize full price sales #ecomchat
• @seonorth: Cons: risk failing to shift all your old stock; pay commission on already low margin. #ecomchat

In conclusion:

1. Caution should be used when implementing sales and discounts.
2. The sale must be strictly controlled in terms of duration and stock.  In terms of control of stock, the sale should just be a way to get rid of old and unpopular stock.  Alterative methods of getting rid of unpopular stock were suggested, and ideally, items sold at a discount must still be in demand.
3. Adding value is crucial to avoid the ‘permanent discount’ label.  For example, this could be done by providing great customer service.
4. There are also a range of problems that can arise through discounting on separate sites.  This just emphasises the importance of strict control over discounts, to ensure the sale is a success.

Join us at 1pm UK time on Monday, and do share this post either on Twitter or via email with anyone you think would be interested.

Dan & James.

p.s. If you’re wondering “what is this all about?” there is an about page to explain everything.