Why Big Retailers Are Always Rotating Promotions
Monday, March 29th, 2010
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.
