How Your Ecommerce Business Can Boost Sales With Discounts

Usman Raza

For ecommerce businesses offering discounts in percentage and dollar amount can help drive people through the shopping cart process. However, not all deals provide the equal value but customers tend to choose the easier route. We'll take a look at how the fashion industry optimizes the discount tactics to boost sales.

Between discounts and percentage off, typically choosing the percentage off makes more sense to customers. It is all about playing with words and choosing the right type of discount to attract more customers.

In the fashion apparel industry, customers are evenly distributed between percentage and dollar discounts, but they all love sitewide discounts. The sitewide discount is often in percentage, and customers seldom hesitate purchasing it. Why? Because customers in general trust this type of discount and think of it as a legitimate means of saving.

You’ll find sitewide discount on apparels, clothing items, shoes, tanks, shorts, handbags and sandals. Naturally, sitewide percentage discount offer is a great way to save money. Here is more on why customers prefer such discounts:

The Type of Words Matters

Wordings play a pivotal role in marketing. Urging customers to get dollar or percentage off is not the same as save money or a percentage off. The former will make customers think they are gaining something while the latter suggests avoiding a loss. Naturally, customers will go for the first option and avoid the other. Apparel retailers focus promoting discounts that make customers feel like gaining more than they spend.

Though the promotion emphasizing on loss avoidance works in some cases, consumers will almost always fall for discounts that they feel will give them something extra. In some cases, the right wording can also make them search other products that are not on sale.

Similarly, wordings can work wonders for your percentage discounts as well. Though discounts are the ideal way to get more traffic to your site, in one case study, the company found that discounts offering sitewide percentage off will work in most cases and customers will gladly avail these for buying fashion apparels.

Percentage Discounts Are As Intriguing

Customers love discounts no matter how they come. A survey found that customers are as intrigued by percentage discounts as with dollar ones. They opened both emails but the dollar one getting a slightly better response. The dollar off coupon generated up to 170 percent more interest compared to discount coupon. The conversion rate also stood at 72 percent higher, suggesting a better customer response. But, the findings don’t stop here.

Survey also found that the dollar off offered higher value compared to the percentage off, suggesting that this may be the reason why the latter saw a better response. Calculations also play a pivotal role in attracting customers. They don’t sit with a calculator to do the math in a percentage offer. Instead, they just respond to what they saw and it sounded good to them.

Percentage Discounts Prevail In Some Cases

There is no denying that discounts work in most cases. They intrigue consumers and eventually make them purchase the product. But, you should know which types will work and when. Below is a list of popular discount types and when should you use them:

  • Email and signup – it is clearly a case of percentage discount. For example, offering 10 percent signup discount for email subscription will bring them in.
  • Win customer loyalty – don’t want to lose your precious customers and want them back? This discount will surely work. You can offer both percentage and dollars off.
  • Clearance stock or end of season sell outs – using percentage off will be more appropriate here as customers often expect aggressive discounts on leftover apparel stocks.
  • Minimum order – your customer just reached the checkout page only to find a discount heading his way. Such discounts come as a pleasant surprise to customers and can retaining them.
  • First time order – to attract first time customers to the business, ideal for small businesses and fresh startups.
  • Buy one get one free – it has been around for ages but still works. It helps businesses get more customers by encouraging customers to buy more than they intended.

Both Discounts Offer Same Value

Economically, both types of discounts offer the same value. However, preferring one type of discount over the other has more to do with psychology than anything. Customers hate to do the math, so they choose the option that seems and feels bigger. After all, $50 or $100 off on an apparel feels like big saving. But, the dollar off discounts don’t always work as efficiently for many deals. This is where psychology comes into play.

It’s Classic Psychology At Play

Discount offers can play tricks on your mind. A 33 percent price discount is essentially the same as 50% increase in quantity. Here, both discounts offer the same value but customers think of the latter as more productive. In an experiment, students were offered to either have 33 percent off or 33 percent extra coffee beans. Despite the latter being more productive, some students thought both as equal. Innumeracy is quite common among customers, something that marketers often use for their benefit.

Keep A Check On Results

You must keep a check on anything that could lead to online conversion, including discounts and deals. Though you may use software to automatically track visitor activity, doing so by yourself gives an insight into what is truly happening. Tracking also help you keep an eye on your promotion links.

Thanks to several online tools and software, tracking has become quite easy. Using tools like Google Analytics, or link builders to get it right.

Offering discounts is a great way to build your customer base. Being persistent with discounts will help strengthen your customer retention. In the meantime, keep using discounts to improve your site’s traffic.

Read more about ecommerce strategies at TechCo

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Usman Raza is founder of and digital marketing guru.When not working there is 99% chance that he is praying with his family. Usman played vital role in developing following brands, He loves exercise, yoga,procrastination, meeting dentists and discuss oral health issues, cooking, internet, coupon codes, and traveling to new places.