A discount sale is a common way to gain sales and attention for ecommerce stores. However, it is also a hard decision to make. You want to stand out during the shopping frenzy season, but sometimes you cannot afford to lower your prices.
If you’re in that situation, this blog is for you. There are other ways you can stand out in the competition! We will share ten alternatives to discounts for ecommerce businesses that add value to your brand and stand out. We’ll divide this into three main sections based on the nature of each alternative.
You can take these into consideration when you think of the next direction you want to go with your ecommerce store.
1. Additional Value
1.1. Give Freebies or Extras
The classic “buy one, get one free” strategy. You sell products at their original price and reward the customer with a freebie. This strategy has more benefits than just increasing conversions. Let’s look at them.
When you discount your products, there is a risk of decreasing the value of your products in your customers’ eyes. They might perceive it as a lack of confidence or quality. This can result in losing your customers’ trust and respect.
But for freebies, this doesn’t occur. Giving out freebies can bring the same result as using discounts without the risks. The results are:
- Liquidate old or excess inventory; and
- Amplify revenue and traffic during holidays or events.
What makes freebies even better? People perceive more value from a freebie compared to a discount. Somehow, people feel better paying the original price just by getting another product for free.
1.2. Give Gift Cards
Another classic is providing gift cards or vouchers at purchase. This means you’re getting the entire profit of the current purchase by applying a discount to a future purchase. You might think, “It’s providing a discount in the end!” However, unlike a regular price cut, this can lead to one whole purchase AND a high likeliness of a second visit to your online store. If it was just a price cut, you might end with less.
Still not convinced? Let’s look at it in the long run. It is said that 10-19% of gift cards remain unused at any time. In other words, these people who forget to use their gift card will have to buy from you at the original price again. Even if you don’t get another purchase, remember that the initial one was profitable.
1.3. Sell Limited
The sweet sound of scarcity can tickle one’s heart into buying a product. It makes you feel like a part of something special, a part of a smaller elite group that managed to obtain a rare item. You can utilise that feeling of hype in your favour.
Whether you release a one-time produced product or a product that will only be released for a limited amount of time, that means you are selling scarcity.
Just be careful. This method is recommended for ecommerce businesses with a degree of followers. Unless you have confidence in your initial release marketing, target audience, and market research, it’s better to avoid it.
1.4. Upgrade Shipping Options
The overall cart abandonment rate is around 70%, and almost half of it is due to shipping costs. Well then, how about providing free shipping during the ecommerce frenzy season?
You can choose to either provide unconditional free shipping or set a threshold. Setting up a minimum spend to get free shipping is healthier for your profit margin. You should find the right amount to make it fair for yourself and your customers. However, if you think your average profit margin is high enough, you can also try unlimited free shipping.
2. Customer Loyalty
2.1. Subscriptions
After quarantine and the rise of ecommerce, subscription services are now familiar to many people. However, how can this be an alternative to discounts?
This works well if your product is either:
- Perishable (appeals to the need to replenish), or
- Has variety (appeals to people who want a surprise or love to build a collection).
The point of subscription services is that you can regularly obtain what you need or want without repeatedly going through the purchasing procedure. There are no worries about forgetting to buy the required products too.
Here, convenience is a significant factor in a subscription model.
It would also be best to remember the cost factor of a subscription service. You can price subscriptions at a lower price point than one-time purchases. That’s because customers will need to commit to ongoing payments. If you make the price point low enough, it will also make it easier for the customers to continue their subscriptions.
Once your customers’ needs click with what you provide, your subscription business could produce consistent income. Just be careful of two more factors. One, be calculative with your margins when you set your price. And two, focus on providing quality products and support.
2.2. Exclusive Membership
So, what is the difference between membership and subscriptions? The models we are seeing here are quite similar. But, the main difference is whether it involves a sense of belonging.
Whereas the objective of a subscription is regularly getting products, the objective of membership is to belong to a group that shares the same interest. The product is more of a secondary benefit, strengthening the experience of belonging to that group.
For example, memberships usually hold some kind of social event, such as webinars, meetups or trial releases. While subscriptions also provide content, they usually wouldn’t go as far as holding social events.
Another aspect differentiating the two alternatives is that one allows you to access the products without the contract. That is the membership. You can purchase their regular assortment, but the membership will provide more benefits. For example, you can get early access to their new and limited-quantity products.
On the other hand, subscriptions require you to sign up to receive their product in any way. There is no regular lineup of any kind.
2.3. Loyalty Reward Program
Here is another confusing one. A loyalty reward program sounds similar to subscriptions and memberships, but it is uncomplicated compared to the former two. As its name suggests, it rewards the customer’s loyalty of coming back to the same ecommerce store.
A well-known example is point cards. Depending on the store, it could also be a stamp card. The more you buy from the same store, the more you get points or stamps to use later on behalf of money. Pretty straightforward, right?
On the side of this point system, it could also have a tiered system. It is similar to an RPG game. The more experience points (store points) you get, your character’s level (account’s tier) will raise. The higher it is, you will be able to use stronger items (get better deals or rewards).
This one also works better with consumable goods. After all, you see them commonly in grocery stores or food stores.
3. Good Will
3.1. Transparent Pricing
As the name suggests, transparent pricing involves the act of revealing how your products are priced compared to your competitors or substitute products in the marketplace.
But, how does this work? Well, let’s take a look at how Everlane executes this strategy with a blast.
If you search their website, you can find a page dedicated to presenting their philosophy, “Radically transparent”. They use their content to show that their prices are already as cheap as possible. This means they don’t need to discount their products.
Furthermore, Everlane shows the cost of production and compares the ultimate sales price with other traditional retailers. You will be astonished by the difference. This is possible because they got rid of the middlemen from the distribution process.
But wait, their transparency doesn’t end here. In the past, Everlane has decreased the price of their cashmere sweaters. Why? It was done in response to the fluctuation of raw cashmere costs. Most retailers don’t go through the trouble of decreasing their prices according to the ups and downs of material costs. Seeing that Everlane had done this, you can tell how they truly care about their customers and follow their slogan.
3.2. Donate for the Greater Good
Social awareness can play a big part in branding and customer loyalty. Instead of just getting a discount, customers are provided with the choice to buy for a cause. They won’t have to feel any guilt about buying a shiny new product because someone else will benefit from it too!
Let’s look at two examples of how ecommerce businesses can be socially aware.
The first example we will look at is donating a portion of the sales. An ecommerce business could partner with a not-for-profit organisation that conducts activities aligning with its brand. If you are also passionate about making changes, this could be a great alternative to discounts.
When choosing a charity to support, consider ones that:
- Align with your brand/customers’ values
- Appeal to the general public
- Are local around your area
- Are related to your passion
There are several ways you can approach the donation method. A common one is donating a percentage of the customer’s purchase. Another one is applying it to specific products, like what Apple does with their (RED) series. Or, you can donate a pair of socks to those in need every time someone buys your pair of socks.
People will want to know whether their contribution is being put to good. So, make sure you are transparent regarding your donations. Notify your customers about-
- Who you’re donating to
- Why you’re doing it
- How the donation process works
- The total amount of money or products sent for donation (optional)
The second example is conducting activities related to protecting the environment. The most common example is planting trees, but you can also conduct cleanups. This method works well if you provide products that are kind to the environment, like recyclable, compostable or reusable products.
Research shows that people are more likely to purchase from a store that’s conscious of the environment. If you’re not sure whether it will work for your store, you can at least try it for a limited time during the next sales season.
3.3. Free Consultation
Is your product aiming for a niche market? Does it involve a specific procedure? If so, providing a free consultation could be the way for your ecommerce business. If you’re working on reaching out to beginners in your niche field, this would especially be the case.
For example, maybe your product is a kind of DIY kit. Whether it would be knitting, moulding, modelling, etc., some people would want to learn and get better at it. If you provide order-made products, people could seek advice regarding the options.
It’s an excellent opportunity for you to make a one-on-one relationship with your customer. Once they go through a smooth and helpful experience, they will more likely come back for the same experience again.
Conclusion
We’ve looked at 10 alternatives to discounts for ecommerce businesses in this post.
- Additional Value
- Freebies
- Gift Cards
- Limited Editions/Time
- Upgrade Shipping Options
- Customer Loyalty
- Subscriptions
- Exclusive Membership
- Loyalty Reward Program
- Good Will
- Transparent Pricing
- Donating for the Greater Good
- Free Consultation
All of them show excellent results when implemented correctly. Just don’t forget to choose depending on your branding, business model, product, and customer needs. When it all matches up, you won’t have to rely on painful discounts to make sales anymore.
