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Mastering eCommerce Offers: Strategies and Management Tips

Rich Towey
April 5, 2023
6 mins

As an eCommerce retailer, one of the quickest ways of increasing your sales and revenue is through offers.

Some of the earliest forms of promotions entered the public eye nearly 150 years ago. Fast-forward to the present day, and even though purchasing methods could not be more different, nothing quite motivates shoppers like an attractive offer.

Retailmenot recently surveyed thousands of US consumers to assess modern-day attitudes toward promotions. The findings were staggering:

  • 80% of consumers will purchase with a new brand if they provide an offer
  • 69% of millennials cannot complete a purchase without an offer
  • 74% of US shoppers see offers as the most important factor when deciding what to buy

Offers remain vitally important to consumers, but many retailers fail to squeeze the most out of them.

Some brands go too heavy with their discounts. They drive lots of unprofitable sales that take more than they give.

Others measure their offers incorrectly or not at all. They use intuition rather than data to guide their strategy and run largely ineffective promotions their customers don't want.

Managing your offers takes work. However, given the power that promotions have over purchasing decisions, it's an area that could genuinely take your online business to new heights.

In this piece, we'll be going through the fundamentals of a gold-standard offer strategy to help you convert price-sensitive shoppers without the after-effects.

Building an offer strategy: the first step

We’ll start by clarifying an important point: if you run broad, one-size-fits-all promotions, you could be left behind.

With retail margins getting tighter, many brands have realized that continuously giving big discounts to every customer is financially unviable.

Recently, Boston Consulting Group urged retailers to think "smarter" and "more strategic" when running promotions after finding that 30-40% are ineffective or unprofitable.

The group pointed out two main issues:

#1 Retailers serve too many promotions

“In this saturated landscape, promotions cannibalize each other, while consumers seek simpler and more personalized offerings."

#2 Retailers use offers for a short-term boost 

"An overemphasis on day-to-day work, coupled with intense pressure to meet sales and share goals, can spur promotion teams to focus on introducing short-term corrections to a system that isn’t optimized for long-term success."

We agree with both of these statements. We also think we have a way of making your offers more impactful and profitable.

The solution: personalized offers

BCG went on to survey 1,000 consumers to understand their attitudes toward retail promotions. Over 60% said they would prefer to see more relevant promotions, highlighting the need for personalization rather than volume.

Personalizing your offers gives you two things. Firstly, your customers are more likely to respond to promotions that reflect things like their past purchases, recently browsed categories, and behavioral signals.

Meanwhile, as a retailer, you give away less value by only intervening when your customer needs something during their journey. 

Pro tip:

These days, the term ‘offer’ refers more to an intervention rather than a discount. Your offer could be just about anything – a recommendation, a reminder about a product, or a money-off incentive. 

Here are some examples of when an offer might become useful:

  • Delivering a discount when a high-value customer shows an intent to exit your site
  • Making product recommendations based on what a customer has in their cart
  • Serving a discount to a customer who hasn't purchased in a few months
  • Rewarding a customer for a 10th purchase

The anchor of this strategy is 1-2-1 targeting. Provided you are using your data to serve a personalized offer, you're on the right track.

Now let's get onto the types of offers worth running.

Examples of personalized offers

We recommend starting small with your personalized offer strategy and scaling up once you start to see some results.

Any one of the following promotions is an ideal starting block.

Limited-time offers

Creating a sense of urgency is one of the most effective ways to drive sales.

Give your offers a start and end date and communicate this to your customers. Through limited-time offers, you can stimulate customer engagement and motivate them to purchase promptly.

This daily deal is a great example of a tactical eCommerce offer

Strong examples of these offers might include a daily deal on sweatshirts to customers with a t-shirt in their cart, or a keyboard to someone checking out with a laptop. The next day, you could change the product to spread your sales across a bigger range.

Spend and save

If you like using discounts, why not switch your broad promotions with a ‘spend and save’ offer?

This sees you providing discounts that match the customer’s cart value. Customers spending over $100 might get ‘5% off’. Customers spending $150 might get ‘10% off’, and so on.

It’s a great way to deliver value for money while increasing order values.

Free shipping

Free shipping is one of the best tools for getting low-value customers to spend more.

We recommend using a progress bar to show your shoppers how close they are to getting delivery on the house, which might encourage a bigger order. 

A customer is offered free delivery to encourage them to spend more

You give away nothing but information on your shipping policy, and the customer feels they are getting something in return. It's a win-win situation.

Upselling and cross-selling

Upselling and cross-selling are two very effective tactics for boosting order values.

With upselling, you might recommend or provide a discount on a premium (i.e. more expensive) version of someone’s intended purchase. Consumer electronics retailers have lots of options for doing this with products like TVs, laptops, and household appliances.

With cross-selling, you do the same for products that complement the purchase. This is a popular offer among fashion brands that want to encourage customers to 'complete the outfit'. See how apparel giant Adidas recommends socks for customers checking out with trainers.

Adidas cross-selling socks to customers with trainers

Take advantage of upselling and cross-selling during the checkout process to boost sales at the final moment.

Measuring offer effectiveness

Once you've started to view offers in the 1-2-1 lens and set up your first campaigns, you need a way of measuring their effectiveness.

Testing and analysis are essential for mastering the delivery of eCommerce offers. Without this, you could be missing out on a heap of extra revenue.

Our advice is to measure your offers in the context of your unique goals and challenges. Simply chasing sales is a good idea, but every retailer has something more specific. Perhaps you need more new customers or have a high level of abandonment. Set up your offers to feed into these goals and see how well they're performing.

To maximize your effectiveness, use A/B testing to see which copy, designs, and offer types drive the best results. Identify what works and what doesn't so you can refine your offers accordingly.

A final tip: use automation to give shoppers more of the offers they like and less of the ones they don't. Many technologies enable you to run tests and automatically push the winning variants. Make use of them for an extra edge. 

The five secrets of mastering eCommerce offers 

In summary, here are the five secrets to mastering the art of delivering eCommerce offers:

  1. Follow BCG's advice by ditching your broad offers and thinking "smarter"
  2. Use personalization to resonate with your audience
  3. Choose offers that align with your unique goals – not just your sales targets
  4. Run A/B tests to develop a truly intelligent eCommerce offer strategy
  5. Use automation to make the most of a good result

Through diligence and careful targeting of your audience, you’ll see a significant improvement in your sales and revenue. So don’t wait any longer. Start working on your eCommerce offers today, and watch your online business grow!