How To Offer Discounts And Drive
E-Commerce Revenue Growth
Discounts are everywhere online, but e-commerce business owners need to do more than just slash prices if they want to win customers and target long-term growth.
Between discounts for new customers, loyalty rewards, and blockbuster sale events, it’s hard to imagine someone saying no to paying less. Businesses know this, which is why many offer discounts to win buyers over.
Small and medium enterprises (SMEs) in Asia Pacific and beyond are offering regular deals to stay ahead in the competitive e-commerce industry.
With so many brands running sales, how can your small business stand out? Here’s your cheat sheet for leveraging online shopping discounts, and what you need to consider before running promotions.
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Using discounts to stand out in e-commerce in Asia
Different discount types drive different outcomes. Some are designed to attract first-time buyers, while others promote repeat purchases.
Platforms like Hong Kong-based beauty and wellness site Strawberrynet offer tiered discounts to cater to different customer segments, instead of going with a one-size-fits-all approach.
8 types of discounts and how to use them
The nature of your business impacts your discount offerings. For instance, holding big, frequent sales goes against the positioning of luxury brands, and will likely erode any notions of exclusivity.
Here’s how you can leverage the most popular types of discounts:
- 1. Flash sales
- 2. Seasonal sales
- 3. Deals for newsletter subscribers and social media followers
- 4. Referral discounts
- 5. New customer perks
- 6. Loyalty rewards
- 7. Livestreaming or social commerce discounts
- 8. Bulk purchase prices
1. Flash sales
Sell products at a steep discount for a limited period. Sitewide flash sales are common on e-commerce platforms like Lazada, Alibaba, and Shopee.
These create urgency and have a high chance of going viral, making them ideal for businesses seeking the spotlight. They also help get old or slow-moving inventory off your shelves.
2. Seasonal sales
Deals that coincide with occasions like Christmas, Valentine’s Day, and the beginning of summer all generate excitement and play upon feelings associated with certain holidays. To tap into customers’ holiday mood, plan sales that feature products themed around these holidays.
In Asia, Double 11 or Singles Day, which happens on November 11, is one of the most popular sale events. In 2022, the value of goods sold reached US$157.97 billion – more than four times what shoppers in the U.S. spent during Cyber Week the same year – making it the world’s biggest shopping event.
In 2023, China’s State Post Bureau reported that about 5.26 billion packages were shipped between November 1 to 11, up 16% from the previous year.
3. Deals for newsletter subscribers and social media followers
Give discount codes to people who sign up for your newsletter or follow your social media accounts. This can help widen your reach. Another reason to give newsletters a shot? They raise brand awareness and are 40 times more effective than social media for new customer acquisition.
4. Referral discounts
Let buyers become brand advocates and reward them for bringing in their friends as customers. This is ideal for businesses that want to use word-of-mouth marketing to connect with more people, including those whom traditional advertising may not reach.
5. New customer perks
Give potential buyers more reasons to support your brand. You can shave a certain percentage off the total of their first order, or if they meet a minimum amount, or do a BOGO (buy one, get one) deal.
6. Loyalty rewards
Thank your most avid fans with lower prices, exclusive deals, gifts, or coupons for use in future purchases. Before rolling this out, decide how many purchases, or how much in terms of value, it takes to classify buyers as “loyal.” You can also adopt a tiered system with rewards that increase as customers buy more. This strategy is suitable for building long-term customer relationships.
RELATED: The secret to creating a successful loyalty program
7. Livestreaming or social commerce discounts
Shoppertainment increases visibility and reach, enables real-time engagement with audiences, and gives entrepreneurs the chance to really showcase their products. It’s expected to be worth over US$1 trillion in Asia Pacific by 2025, with Indonesia being the “star market” with the highest growth potential, according to a TikTok whitepaper.
To help turn your viewers into customers, give them exclusive discounts. But watch out for potential technical issues and do a dry run before you go live.
8. Bulk purchase prices
Determine what counts as a “bulk” order, and put a cheaper price tag on it. This is ideal for encouraging large buys, which helps you move inventory and makes logistics more efficient.
RELATED: Need help understanding business financials? Read this guide.
Which discounts should your business offer?
To find the right tactics and determine which type of discounts your business should offer, ask yourself these questions:
1. What are my goals?
Clarify if you’re looking to offer discounts to acquire new customers, reward loyal ones, drive e-commerce revenue growth, increase brand visibility, clear your inventory, or something else entirely.
2. Who are my customers?
Analyze and segment your customer base. Do discounts align with their preferences and sensibilities? Are they all interested in getting special deals, or does this resonate with only a handful of segments?
3. How will discounts impact people’s perception of my company?
Ensure your brand’s image aligns with the discounts you plan to offer. For instance, as previously mentioned, luxury brands that capitalize on exclusivity may inadvertently hurt their image by holding large, frequent sales.
4. How will discounts impact my finances?
Check how much the discounts will affect your profit margins. Can you afford to lower prices, and are the expected returns worth it? Your online promotions strategy should align with your longer-term financial goals and contribute to the company’s sustainability.
RELATED: 6 affordable but effective marketing tips for SMEs
5. Is this the right time for a discount promotion?
Time your promotions well, and figure out how often to run them. For instance, you can ride the wave of seasonal sales to make the most of spikes in shopping behavior, but running promos too often may devalue your products and services in the eyes of consumers.
6. What discounts do my competitors offer?
Understand your industry norms and what kinds of deals your competitors are offering to customers.
7. Can I handle the rise in demand?
Your inventory and order fulfillment capabilities should keep up with the increase in sales. Receiving thousands of orders means nothing if you can’t pack and ship the products on time, in good condition.
Discounts are great, but don’t forget the basics
Deals are an excellent way to aim for e-commerce revenue growth, but remember that these are only one part of an omnichannel or multi-strategy approach that will let you successfully navigate the digital economy.
There are other tactics to grow your business, and the other moving parts of your company should also work seamlessly.
If you’re a new e-commerce business and need support with shipping, get your shipping needs sorted here. Our new customers can also get a discount on their first shipment.
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