Regardless of income levels and price point, shoppers are always looking for a sale. And the price-first nature of ecommerce makes sales and promotions a critical part of staying competitive.
But there’s sometimes a perception that if you put your products on sale, you’re sending the message that you’re a brand that has to be discounted in order to convert.
That’s simply not accurate, especially in the home furnishings industry in the United States. Not only do promotions help brands stand out to price-conscious shoppers, they bring manufacturers marketing power as well: Additional product exposure, increased sales and strengthened partnerships with retailers.
At first glance, promotions may seem like they’re all about discounting your products. But there’s more to the story about why promotions are such a key piece of your ecommerce strategy. Let’s dive into how promotions play a bigger role in your strategy, plus tips for planning and executing them thoughtfully.
A promotional strategy is simply your brand’s game plan for driving product visibility and brand awareness to increase conversions. This strategy is comprised of many moving parts, like a promotional calendar, smart pricing and discounts, but they all work in unison to bring exposure to your products more frequently.
“A promotional strategy is used for many things like driving overall sales, moving stagnant products, creating buzz to new product lines and is just really an attempt to capitalize on retailer website traffic,” said Alysa Land, BrandJump Strategic Channel Manager. “Promotions are especially important in ecommerce considering the level of competition and are an excellent way to keep your brand competitive in a way that is mutually beneficial for both the brand and retailers.”
The visibility factor is one of the biggest benefits of being a prominent participant in promotions. Retailers often do large-scale promotions with significant discounts, including marketing firepower like site placement, email blasts, etc. When your products are included in the promotion, you benefit from the retailer’s marketing push to the promotion, allowing your products to be seen by more prospective customers, and creating a better opportunity for sales.
There are many steps that lead to a customer converting, but before reaching that step in the buyer’s journey, the customer must be able to see your products. And a well-timed promotion does just that. When your products are included in the right promos, properly optimized to retailer standards and include the necessary SEO keywords, visibility can skyrocket.
Your brand’s promotional calendar is the guiding light of your retailer marketing efforts. A promotional calendar is designed to allow brands and retailers to plan out the timing and scope of each event. It’s often done with a full calendar year in view, but knowing you’ll likely make adjustments as opportunities arise.
While there’s no strict requirements for a promotional calendar, building one should loosely follow a few guidelines:
So what exactly is a strategic promotion plan? Having a solid strategy means considering a few things in the planning process:
There’s no cut-and-dry example of products you should or should not include in a promotion. That said, below are a few types of products that tend to fit well within a strategic promotional opportunity.
“It can be really challenging at times to get exposure on new products,” said Aileen English, BrandJump Brand Manager. “When done correctly, offering a brand-new product at a slight discount can be just the thing you need to gain traction and make some early sales.”
2. Heavy inventory items: Too much product can really hurt your inventory position. Including SKUs with excess inventory in a promotion is a smart way to try to move through excess product.
3. Discontinued items: Similarly to heavy inventory items, when you need to move product out of your assortment, offering them at a discount via a promotion is a savvy move.
Pricing and the promotions process are heavily tied together. When determining whether to participate in a particular promotion or not, start by calculating your margin goals. It won’t matter how successful the promo is if you’re losing money in the process. Remember: Your regular everyday pricing should be constructed in a way that allows room for promotional flexibility.
A product’s inventory level should be a key factor in promotion participation. If too low, you might consider not including it in your next promo to avoid not being able to fulfill orders and disappointing retailers and the end customer. But if there’s excess inventory or you’ve hit the sweet spot, consider including it in your next promotion to help further drive sales.
This goes alongside margins, but you should always factor in the cost of doing business with a particular retailer. Some retailers have extra costs (like chargebacks) that will need to be factored in when you’re calculating your ability to participate in a promotion.
Promotions are a critical piece of any ecommerce strategy. Developing a thorough and thoughtful promotions plan for your brand will help you gain additional product exposure, increase sales and become a successful partner to retailers.