The Promotions Lever of eCommerce Growth

Wednesday April 20, 2022 | Posted at 8:20 am | By Paul Dicken
April 20, 2022 @ 8:20 am

The Volo Levers framework is a useful checklist of the 10 levers you can pull to increase sales and efficiencies in your ecommerce business. The 5 efficiency-focused levers we’ll come to later in this series. Of the 5 sales-focused levers, we’ve already talked about listing quality, inventory breadth and channel coverage. In this post we’ll talk about the 4th sales-focused lever for your webstore(s) and your presence on marketplaces, including the major ones in the UK which are Amazon, eBay and OnBuy. That lever is promotions.

In the traditional world of marketing there were the 4 Ps – 4 areas to think about when marketing your product or service – product, price, place (ie distribution) and promotions. Within promotions, there were another 4 ‘sub-promotional’ areas: sales (ie people), advertising, public relations and sales promotion. We’re going to concern ourselves with the second and fourth areas.

A promotion is an effort to create an emotion in customers that moves them towards a decision in your favour. The AIDA acronym helps here, as it reminds us of the desired process we’re trying to elicit: Awareness, Interest, Decision, Action. From awareness of the offer to interest, where they engage with the offer, decision where they elect to buy and finally action where they follow through on a purchase. First things first: what are you trying to do with a promotion? Are you looking to to attract new customers with enticing offers? Are you striving to build average order value by encouraging buyers to take additional products with their order? Are you trying to increase customer loyalty and ‘lifetime value’ (to you) by inspiring buyers to make repeat purchases over time?

In order to achieve these three differing goals, the good and bad thing is that there’s a large range of promotional options available, and an array of tools on each marketplace. Your challenge, should you choose to accept it, is to successfully manage your activities and campaigns to make sure you’re growing sales and profits adequately and still have time left to do your other important tasks. Let’s look at some of the promotional avenues.

ecommerce growth chart

Complementary Items

Related items encourage a buyer who has already selected an item to add another complementary item to their order. Examples: a case and/or tripod for a camera, half a dozen replacement sanding belts for a sanding iron, the other two books in a trilogy, or perhaps an accessory to match a piece of clothing. This increases basket size and attaches additional sales at little or no extra cost. Kits and bundles are a great way to communicate value and great service to buyers by packaging up products in ways that make sense to them, while also increasing average order value.

Discounts

Good old-fashioned discounts are a good way of increasing order value. When a buyer’s order value has reached a certain minimum threshold, for example, they could be entitled to a certain discount that you specify. For example, if a customer has spent £55 and they see they get 10% off all orders over £60, it’s a relatively straightforward step to add something small to avail of the discount and possibly pay less than the subtotal of £55.

Buy one, get one free

The ‘buy one, get one free’ or ‘BOGOF’ incentive is designed to make the first item more attractive by getting another one free or perhaps half price. If the product in question is a decent margin to you, you can move additional numbers of it while still maintaining profitability.

Free Shipping

Offering free shipping on items is another promotional tactic, but in fairness is fast becoming table stakes as the ecommerce market matures and intensifies. To use the recent example, you use free shipping for orders of £60 or over to encourages the buyer to add more items to the order to take advantage of the saving on transportation.  Your margins need to be sufficient on the product or products for the offer to make good business sense.

Pricing

A key promotional tool in the competitive battle to drive sales growth has always been pricing. Showing the original price compared with the offer price, using the ‘strike-through’ mechanism, is a proven way to grow sales. That said, it’s very difficult to manually monitor all your prices across the various channels you sell through. Concentrate on your best sellers, therefore, or else use technology in the form of rules-based or algorithmic re-pricers which can automate this important weapon for you.

You probably already use a variety of these promotional ploys in your physical stores and / or webstore(s). Marketplaces also have their own specific tools to drive sales.

Amazon Advertising (more here)

  • Today’s Deals, as well as Prime Day(s) and the traditional retail/ecommerce anniversaries like Black Friday and so on
  • Sponsored Brands – if it’s your brand, or you’re similarly authorised, appearing in shopping result pages and allowing you to showcase your brand identity, strapline and a selection of your products
  • Sponsored Display – these are ad placements that appear on Amazon and elsewhere on the web, using display advertising that you create and manage yourself
  • Stores – functionality that allows you build a multi-page store and content for your brands, free of charge

eBay Promotions (more here)

  • Daily Deals, as well as the traditional anniversaries we talked about above
  • Multi-buy – essentially a version of the BOGOF technique we mentioned earlier
  • Order Discount – as above!
  • Sale Event – example: 20% off all swimwear in May. Use it for in demand items or to offer reduced prices on part of your inventory. You can show customers before and after prices with ‘Markdown’
  • Offers to Buyers – you can engage your interested buyers by offering a reduced price on your listing or giving them the opportunity to make their best offer
  • Coded Coupons – create and share your own discount codes for buyers or groups of buyers
  • Promoted Listings (Standard) – multiple sponsored ads across eBay for high quality eBay sellers to boost the nominated listings’ visibility. You pay per sale
  • Promoted Listings (Advanced) – currently in beta, according to eBay, you can “Drive traffic to your listings with preferred access to the top slot of search using keyword and budget controls.” Also for high quality, active sellers, you pay per click

OnBuy Boost (more here)

  • OnBuy’s pay per sale promotional offering to increase your visibility and your product rank

Successful companies confidently manage all the promotional options at their disposal and can deliver great customer service through the order peaks that result from their activities and campaigns. When you’re great at promotions, you can win more business from new customers and sell more to existing customers. Volo helps our companies grow revenues through dynamic re-pricing, kits and bundles, having things like eBay Promoted Listings (Standard) manageable from within Volo, as well as other automated back end processes.


To talk with us about Promotions and the other growth and efficiency levers in your own business, please send us a note here

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