Discounts = Profits!
You heard is right! There are some neat little tricks in our bag here which will help you understand how you can preserve your profit margins and still give discounts.
Whenever a retailer thinks of giving discounts, the first thing that pops up in their head is, “But what about my profit margins?” We know that’s a real concern for every retailer and the very reason why many retailers refuse to give discounts. But here is the catch; you are more likely to lose on business in the long run if you don’t give discounts.
Customers, thanks to the highly ambitious market scenarios, have been psychologically conditioned to expect discounts. So if they find one place offering discounts and the other selling on MRP, guess where are they likely to walk? Another major concern is the fact that the brick and mortar stores are feeling the heat from their online counterparts. They now think they need to flash sale everything in order to attract customers. Wrong! It won’t get them very far.
For today’s price-smart customers, offering well-timed discounts is a giant leap to be a successful retailer. Here are 4 neat little tricks that will help you be a step ahead-
- Provide a price guarantee
Technically speaking, a buyer doesn’t know when the best time to buy is. They rely on their instincts and festival time sale to make their purchases. Here is an opportunity for the retailers. They can guarantee or match lower prices that may appear later in the season and put the customer’s mind at ease. Now that makes it the customer’s responsibility to do the homework and see when the lower pieces appear so they don’t miss it. In doing so, you have successfully gained a new loyal customer!
- Offer step discounts!
Don’t give the entire discount at once. For example, start with giving 10% discount on a purchase of 2000 rs. Increase the discount to 15% if the customer shops for 2,500 and 20% if he shops for 3000. This encourages the customer to reach a higher level of discount and some customers may end up buying additional products.
- Incentivize big-ticket customers to buy now.
It’s best to incentivize customers to make big purchases, e.g. an appliance, right at that moment for a lower price if they let go of their right to return that product or seek price adjustment. So, even if prices may be lower in the future, the customer doesn’t have to worry about it, and benefits from the extra discount by buying today.
- Flash sales!
Only those customers who really care about price will regularly monitor the prices and check all the emails. The flash sale will induce a sense of urgency in the consumer and make them buy a product instantly since there is no guarantee if that price will appear again. Focus on specific popular products for flash sales and not discounting across the board (which spoils consumers into expecting discounts and special terms on everything.
Instead of engaging a head-on price war with your competitor, play smart. Give step discounts and flash sales to attract bigger sales.
Wish to know more about how you can offer Price Discounts & still preserve margins? Visit us at Datahut, your big data experts.