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Tactics For Recessionary Times Documented By New Study
The recession is global; every retailer is feeling the pinch. Research suggests that it is tougher on bricks and mortar retailers but online retailers are taking a hit as well.
Fortunately, online retailers are the ultimate nimble sellers and they are quickly responding with changing tactics designed to recapture lost business by appealing to the 'I need a bargain' point of view common to todays Internet purchasers.
The E-tailing Group, an e-commerce consulting organization, recently completed a study of online merchants meant to capture the changes being implemented at this time. The results are in some ways predictable and in other ways as ingenious as you might expect from this group of business people.
Clearance Areas
More merchants are either establishing or emphasizing their clearance sales as 86% of merchants noted, up from 72% the year before. Many merchants are creating large banner signs that dominate the page announcing Deal of the Day, Close Outs or Clearance/Sale Items.
Limited Hour Sales
There has been a huge jump in the limited hour sales strategy from 18% to 42%. These sales are often one day, lunch hour or tonight only type offerings which force purchasers into a buying decision.
Quantity Purchases
Online retailers are offering discounts for quantity purchases (20%; not measured last year) but there has been a decline in the buy one, get one free offer (down to 6% this year from 8% last year) which is apparently viewed as too generous an offer. Similarly, the tactic of gift with purchase declined from 62% to 44% during this time period.
Contests
The lure of the opportunity to win has become clear and is being used by 43% of respondents versus 32% last year.
Coupons/Other Deals with purchase
There is a slight trend towards couponing and a greater trend towards rewarding a sale with a discount on the next sale (4% to 11%).
Shipping
Shipping opportunities continue to be a strong source of establishing competitive advantage. While free shipping remains an uncommon offer at 8%, free shipping under certain conditions has gone up as much as 9% and free shipping to a store has gone up 11%.
If you are struggling with declining sales revenue or declining conversion rates, you may want to consider adopting one or more of these strategies. However, as with any marketing tactic, you need to do the analysis to be sure that the cost of the tactic, e.g., 10% loss of revenue on certain products, will be made up by the increase in volume of sales.
If you are concerned about margins, you may want to begin with tactics that don't necessarily cost upfront revenue such as time-limited sales, emphasizing your sale items on landing pages or contests which limit the prize to just a few items or deals.
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