80% of shoppers will make quicker decisions when they encounter deals they perceive as a "great value". In the competition for market share on e-commerce platforms, creating attractive promotions is essential. So how can you leverage promotions as a tool for revenue growth without becoming overly reliant on them? UpBase will share insights on this topic in the following article.
Overview of Promotion Types on E-Commerce Platforms
Promotional programs have become essential tools for sellers to attract customers, boost sales, and enhance brand visibility on e-commerce platforms. Platforms such as Shopee, Lazada, Tiki, and TikTok Shop offer a variety of promotions to help sellers achieve their business goals. Here is an overview of popular promotion types available on these e-commerce platforms for businesses.
1. Flash Sale
A Flash Sale is a short-term promotion, usually lasting only a few hours, where products are offered at significantly reduced prices. This type of promotion attracts significant customer attention due to the urgency and appealing discount levels.
Flash Sales are often applied to best-selling products or those with high inventory levels. By notifying customers in advance through email, social media, or platform alerts, and by booking KOCs/KOLs or affiliates, businesses can create anticipation and drive customer purchases.
2. Voucher
Discount Vouchers are a popular type of promotion that allows customers to receive a discount directly on the total order value by entering a voucher code at checkout. This aims to encourage customers to complete their purchase and increase the order value.
To leverage the benefits of discount vouchers, businesses should create multiple types of vouchers with varying order values and discount amounts to attract different customer segments. Using vouchers as a tool in major marketing campaigns and interactive social media minigames can also help increase the conversion rate for the store.
3. Freeship
Free shipping is one of the key factors customers consider when shopping online. E-commerce platforms often offer free shipping codes, and businesses can also purchase free shipping packages to reduce purchase barriers and increase conversion rates.
Using free shipping in combination with discounts and setting free shipping conditions for orders over a certain value can help businesses increase Average Order Value (AOV).
4. Flash Deals and Promotional Combos
Flash Deals are products heavily discounted for a short period with limited quantities, while promotional combos are related products sold together at a discounted price to increase order volume and optimize profits from cross-selling.
To leverage these two types of promotions, use Flash Deals for products that attract significant interest and create promotional combos with related products or new items to boost overall sales and reduce inventory of less popular items.
See also: Strategies for Setting Up Successful Promotions on E-Commerce Platforms
5. Loyalty Program
A loyalty program rewards customers with points or special offers for frequent shopping at a store.
Loyalty programs are a powerful tool for building customer loyalty and encouraging repeat purchases on e-commerce platforms. Major platforms like Shopee, Lazada, Tiki, and TikTok Shop each have their own loyalty programs designed to help sellers retain customers and increase customer lifetime value.
Reward Points Model
The reward points model is the most common form of a loyalty program. Customers accumulate points based on their spending or specific activities (such as reviewing products or sharing on social media). These points can be redeemed for discounts, gifts, or special offers. For example: Shopee Coins, Lazada Rewards, etc.
Exclusive Discount Codes
Exclusive discount codes are codes that only members of the loyalty program can receive and use at checkout.
Member-Exclusive Pricing
Sellers can offer special pricing exclusively for members on certain products during the program.
How to Leverage a Loyalty Program:
- Choose the Right Format: Based on customer needs and industry specifics, businesses can select from various program formats, such as point-based rewards, tiered membership, special offers, or subscription-based programs.
- Ensure Clarity: The program should be designed to be easy for customers to understand and participate in. Be clear about how points are earned, redeemed, or how to achieve different membership tiers.
- Send Regular Notifications: Use email marketing or push notifications to remind customers about their current points balance, upcoming expiration of offers, or products they might be interested in.
- Create Clear Tiers: Establish membership levels such as Silver, Gold, and Platinum, each offering increasingly attractive benefits.
6. Periodic Promotions in Campaigns
Periodic promotions such as 9.9, 11.11, Black Friday, or Year-End Shopping Festivals are major sales events on e-commerce platforms. Additionally, each platform will have its own mini spike days. For example, Shopee has the 15th and 25th of each month, and TikTok Shop follows a similar pattern. On these days, the traffic on the platform will be extremely high, and businesses should leverage these peak shopping times to boost revenue.
Planning and preparing inventory ahead of a campaign will help businesses meet the increased demand. Additionally, businesses should utilize on-platform advertising, push notifications, and email marketing to attract customers and seize the opportunity to multiply revenue by 5x to 10x.
7. Livestream sales
Livestream sales is a form of direct promotion and selling through live streaming on e-commerce platforms, enhancing customer interaction and encouraging immediate purchase decisions. Offers and vouchers are available exclusively and are valid only during the livestream event.
To make the most of this type of promotion, it’s important to choose the right timing for your livestream, scheduling it during peak viewing hours. Develop an engaging livestream script, providing detailed product introductions and exclusive offers available only during the livestream.
Additionally, businesses can collaborate with e-commerce platform partners for livestream events. Participating in live sessions with platform partners, offering attractive deals, and including affiliate links are powerful strategies. Moreover, leveraging push view slots and sponsored vouchers from partners can significantly enhance brand visibility and revenue while optimizing costs. This approach benefits the business comprehensively, from attracting new customers to strengthening relationships with the platform and partners.
Combining Promotions to Optimize Business Performance on E-Commerce Platforms
Combining various types of promotions on e-commerce platforms not only enhances the effectiveness of each individual campaign but also creates a synergistic effect, optimizing revenue and building brand presence. Here are some strategies for combining different promotions to achieve the best results for your store.
Combining Flash Sale with Free Shipping
Combining a Flash Sale with a free shipping program can enhance appeal and encourage customers to make a purchase decision.
How to Implement:
- Select the Right Products: Choose best-selling items or inventory that needs to be cleared to feature in the Flash Sale.
- Advance Notification: Promote the Flash Sale a few days in advance via email marketing, social media, and push notifications so customers are aware and prepared to participate.
- Set Conditions: Establish free shipping for orders that meet a certain value threshold to encourage customers to buy more to qualify for the offer.
Customers will be attracted by the significant discounts during the Flash Sale and further motivated by the free shipping offer. This approach helps rapidly increase sales and address excess inventory.
Creating Promo Combos and Livestream Sales
Combining product bundles with livestream events can maximize sales and build relationships with customers.
How to Implement:
- Design Product Combos: Create bundles of related or complementary products at discounted prices. For example, pair a main product with accessories or complementary items at reduced rates.
- Livestream Sales: Use livestreams to showcase these product combos, highlighting the benefits of purchasing bundles versus individual items. Offer special discount codes exclusive to the livestream to encourage immediate purchases.
- Engage with Customers: During the livestream, interact by answering customer questions, hosting mini-games with giveaways or discount codes to capture attention and increase conversion rates.
Livestreams facilitate direct engagement with customers and drive immediate purchasing decisions, while product combos not only increase the average order value but also help move slower-selling items.
Using Discount Codes During Major Campaigns
Combine discount codes with major promotional events such as 9.9, 11.11, or Black Friday to increase order value and conversion rates.
How to Implement:
- Create Attractive Discount Codes: Issue discount codes with appealing values specifically for major promotional events. For example, offer a 10% discount on orders over 500,000 VND.
- Promote Widely: Use e-commerce platform advertising tools, email marketing, and social media to announce the discount codes and encourage customers to use them during promotional events.
- Combine with Other Offers: Apply discount codes alongside other promotions like free shipping or gift with purchase to add more value for customers.
Customers often look forward to and are willing to spend more during major sales events. Providing discount codes helps increase the average order value and stimulates purchasing behavior.
Combining Flash Sales with Affiliate Programs
Use Flash Sales to attract attention and pair them with an affiliate program to expand reach and boost revenue.
How to Implement:
- Select Flash Sale Products: Choose products with high sales potential to feature in your Flash Sale with significant discounts.
- Coordinate with Affiliate Partners: Include Flash Sale products in the affiliate program so partners can promote them, driving more traffic to your store.
- Monitor Effectiveness: Use analytics tools to track the performance of the campaign and optimize your strategy as needed.
Combining Flash Sales with an affiliate program not only increases traffic and sales but also helps your business reach new customer segments.
Participating in Marketplace Marketing Solutions
Marketing Solutions are in-platform marketing tools offered by e-commerce platforms to sellers, such as Shopee's Mum’s Club package and Mall Day package. Each package comes with its own participation requirements, cost levels, and benefits. Generally, these Marketing Solutions help increase traffic, visibility, and revenue for your store.
Depending on revenue goals and investment budgets, businesses can choose suitable packages. Larger businesses with bigger budgets might opt for comprehensive packages covering entire campaigns, while smaller businesses seeking strong revenue growth on specific campaign days can select packages focused on teasing and D-day promotions.
Details about Shopee’s Marketing Solutions packages and case studies are thoroughly covered in the article "Shopee Marketing Solutions for Brands" by UpBase. Businesses and sellers can refer to it here.
What should businesses do to avoid relying on discounts?
While promotional programs like discounts are important in business, over-reliance on them can impact profit margins and brand value. Instead, businesses should focus on alternative strategies such as bundling products and offering experiential gifts to create long-term value and strengthen customer relationships.
Combo Bundling Strategy to Increase Average Order Value (AOV)
Combining products into bundles is an effective way to increase the average order value (AOV) without relying on discounts. When customers purchase multiple products in a single order, they perceive greater value, and businesses can boost revenue without heavily discounting individual items.
How to Implement:
- Bundle Complementary Products: Combine related or complementary products to create appealing bundles. For example, a beauty store might bundle a skincare set including cleanser, toner, and moisturizer.
- Special Offers for Bundles: Instead of offering significant discounts on individual items, provide a modest discount when customers purchase a bundle. This naturally encourages them to buy more products.
- Seasonal Bundles: Create seasonal or holiday-themed bundles to meet special customer needs, such as a Lunar New Year gift set or a winter skincare combo.
Offering Free Samples to Increase Customer Affinity
Giving out free product samples not only captures customer attention but also allows them to experience and appreciate the product before making a purchase decision. This not only increases conversion rates but also builds brand loyalty.
How to Implement:
- Include Free Samples with Purchases: Offer a free sample when customers buy a specific product. For example, if a customer buys a bottle of perfume, you could include a sample of another fragrance line.
- Review-for-Gift Program: Encourage customers to try out products and leave reviews on your page in exchange for a gift. This not only boosts engagement but also generates more positive reviews for the product.
- Gift with a Spending Threshold: Set a spending threshold and offer a free sample to orders that reach that amount. This encourages customers to spend more to receive the gift.
Conclusion
Promotions on e-commerce platforms not only boost sales but also create opportunities for businesses to build their brand and maintain long-term relationships with customers. To effectively leverage these promotional programs, businesses need a clear strategy, a deep understanding of customer needs, and the flexibility to adjust their approach as needed. Always stay updated on trends and make the most of the tools and support provided by e-commerce platforms to achieve the best results.
