5 Tips for Diversifying Your Discounts Before the Holiday Season

Last year’s holiday sales were about $707.5 billion, the highest since… well, the previous year. Holiday shopping is perpetually on the rise and for about a quarter of the retail marketers surveyed, those sales generate at least 40% of their revenue for the entire year. The most wonderful time of the year is also the most lucrative, even with all the discounts.

Holiday shopping is practically synonymous with deals and no retailer can make their fourth-quarter numbers without a strong discounting strategy, “strategy” being the operative word. As our Chief Customer Officer Cassie Young told Forbes, “Training customers to buy only on promotion works against the long term customer value of a business.”

We recommend diversifying your discounts, testing extensively to learn which ones work best for different customers. That way, you can boost holiday sales without undermining your margins, both now and in the future. Here are five tips:

Time-Bound Discounts

Time-bound discounts — those exchanging a prompt purchase for delivery by December 23, for example — are particularly powerful during the holiday season. If you use this strategy, be sure to tell your customers early and often. Flash sales are another foolproof holiday strategy, especially when you work a countdown clock into an email message’s creative.

With this Black Friday preview for its email subscribers, Home Depot conveys exclusivity. The retailer also creates a sense of urgency, stressing that this 30% discount is both temporary and limited.

Tiered Discounts

Tiered discounts — save $20 with a $200 purchase, for example — are another great way to boost order values. Consumers generally see volume-based discounts as familiar and reasonable. As a result, this discount is less likely to hurt your brand in the long run.

Saks Fifth Avenue cleverly uses tiered discounts to encourage larger order values and repeat purchases at the same time. Like many holiday offers, this festive email extends increasing incentives to purchases of increasing size. But notice that Saks isn’t actually offering any immediate discounts. Instead, customers get gift cards, encouraging them to keep shopping.

Free Shipping

Shipping’s effect on ecommerce can’t be stressed enough. Ever wonder why cart abandonment rates are so high? According to Accenture research, having to pay for shipping is a common catalyst, second only to price. You can always offer free shipping for a limited time or for orders of a certain size, which blunts the economic impact of free shipping and encourages customers to keep shopping. If possible, we’d also recommend testing free shipping vs. further discount to see where the biggest impact is made.

Target is one retailer that deployed the free shipping strategy last holiday season. In a competitive move against Walmart and Amazon, Target offered free two-day shipping for all customers through December 22. After the holidays, customers will need to spend at least $35 or be REDcard memberships for the same privilege.

Free Gift or Incentive

Everyone loves holiday gifts, even the people who are mid-buying them. These incentives are enticing, but demonstrate what a powerful pair data and discounts can be. Proper data collection enables retailers to see how many shoppers follow up their freebie with a full-priced purchase. If you do this well, you may even create some new loyalists by February.

Google has yet to release its most-searched holiday gifts this year, but the iPhone X topped last year’s list. The device is still popular and almost certainly helped Best Buy catch consumers’ eyes with this incentive-based discount. 

Loyalty Perks

Speaking of loyalty, linking discounts with loyalty programs is another great way to offer perks without destroying profit margins. Offer loyalty bonus points to new members who convert straightaway and increase the likelihood they’ll come back. Leveling up customers who make particularly big purchases is another strategy we’d recommend. Considering how much people spend during the holidays, loyalty points or status are likely to seal the deal for some shoppers.

Looking for more inspiration this season? Check out our 2019 Holiday Marketing Playbook here.

Sailthru's 2019 Holiday Marketing Playbook

There’s plenty of time before “the holidays,” right? Not exactly. Holiday sales are perpetually on the rise, while consumers are starting their shopping earlier and earlier. This means retailers must get a head start before the holidays, especially since the most wonderful time of the year is also the most lucrative.

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