eCommerce Analytics

Every week we look at over 500 retailers to keep tabs on what kind of free shipping promotions they’re offering. We’ve done this long enough to notice an interesting pattern: the largest retailers always have a promotion running. Whether it be free shipping, free shipping upgrade, flat rate shipping, BOGO, x% purchases over $y, or free gift with purchase, these promotions are always for a limited time. And as soon as that promotion ends, the next begins. Why?

Differentiation is Not Just for Merchandise

We know that people value things differently. That’s the core tenet of differentiation, which in turn is the basis of all marketing. While one person is willing to pay a top dollar for great customer service, another values a eCommerce site’s ease of use, while yet another cares only about quality of merchandise.

The same is true for promotions. Many people care about free shipping while others are excited by the idea of getting a free mystery gift. All, however, are spurred to action by a rapidly approaching deadline.

By rotating promotions, retailers get to appeal to all types of preferences while introducing a never ending element of scarcity. And because each promotion appeals to a different segment, there is usually no overall time-shifting of demand. Each segment delays or expedites their purchases based on promotion timing, but as long as each segment is of the same size the overall level of demand remains about constant.

What About Smaller Retailers?

Rotating promotions is less common among smaller retailers but a few merchants swear by it. Week after week we see them bounce back and forth between, say, 20% off purchases over $100 and free shipping with purchases over $100 promotions. All, of course, are limited time only. And technically, it’s true.

So if you’ve been looking for a way to add a sense of urgency to the buying decision then consider rotating two or three promotions every week. It’s quite easy to do and you might find that more shoppers end up pulling the trigger instead of leaving abandoned carts.

I talked last time about how variable pricing is a great way to maintain your margins on sale items and I gave three general steps on how to perform variable pricing with email marketing. The gist is that each of your customers has a different value for your products and the key is to figure out how to get them each to pay closer to what they are actually willing to pay. The main takeaway is that you should give different sale discounts to different segments of your customers based on their behavior patterns - and the patterns of other customers like them - concerning discounted items. Today, I’ll take a look at the main arguments that companies have when it concerns variable pricing.

Read Variable Pricing-Based Email Marketing: 25% Less Customers Can Make you 22% More Profit »

With so many reports out there talking about why retailers are going to be taking such a hit this year, I thought it might be worthwhile to focus on the positive. The down economy has opened up several opportunities for retailers to try out new and interesting ways of reaching their customers.  I wanted to share a few of these with you.

• Read Surviving the Holidays: 5 Marketing Tips for Retailers »

Ad Age reports on a Shop.org study that shows 45% of online retailers are significantly increasing their budget for free shipping this holiday season.  It appears that, this holiday season, everyone is a defector in the prisoner’s dilemma that is free shipping.  

We’ve always advocated holding firm on shipping charges but the tide is simply too strong to resist this holiday season.  Instead, consider a way to minimize the damage.

Read 45% of Online Retailers Increasing Free Shipping Budget for Holidays »

With today’s news peppered with articles about the possible demise of Circuit City, the sinking Dow, and the continued decline in consumer spending, many companies are concerned about how their customers are going to respond to the tough times ahead. Several online retailers are already going down the discount path to try and get customers to spend their money early– well before their credit dries up. I’m sure many of you have already been hit up like I have with numerous discounts from shops that don’t typically give discounts – I’ve been surprised by the recent emails I’ve received from the likes of JCrew, a company that never seems to discount their merchandise.

Read Finding Customers Who Will Weather This Storm: Customer Segmentation in a Down Economy »

With the holiday season upon us, and with the specter of economic downturn no longer looming but now in full unfurling, the hue and cry for free shipping to draw customers has never been greater. Almost everyone insists that drastic price cuts and coupon-like free shipping are necessary evils to keep your customers from the competition. But I would urge smaller retailers to resist giving up margin and making deal-seekers of their entire housefile. Instead they should get more personal.

Read Retail Marketing Strategy Should Rely More on Personalization, Less on Free Shipping »

This economy thing looks bad.

As we all prepare ourselves for diminished consumer spending in the months ahead we can expect to see price play a pivotal role in buyer decisions.  Is there any way retailers can avoid engaging in price wars and destroying margins this holiday season?

Read Avoiding Price Competition this Holiday Season »