How to Drive Value for Customers Without Getting Into a Discount Cycle

As Americans come out of lockdown and revenge spending continues to gain momentum, retailers are tasked with finding new ways to drive loyalty and increase customer engagement — ways that go beyond promotions and discounts.

This is increasingly important for e-commerce operations. While we can expect that physical retail promotion cycles will increase as they did in Q4 2020, in order to increase footfall, many retailers have pulled back their reliance on digital offers. The pandemic has moved demand to digital channels, requiring less discounting to drive demand. Earnings calls in the first quarter of 2021 are filled with mentions highlighting the importance of price realization and increasing average unit retail. But the fact is, consumers do become accustomed to promotions, so even if we're no longer reliant on things like coupons to increase demand, it’s imperative that brands find the right ways to drive conversions.

In order to drive more meaningful customer experiences and cultivate brand loyalty, it’s important to not underestimate their desire for convenience and personalization. By keeping these consumer preferences top of mind, retailers can convert shoppers into loyal customers and, in turn, implement a marketing strategy that moves past promotions and discounts.

Find More Meaningful Ways to Drive Loyalty

Brand affinity is becoming more important than ever before. Consumers are far more likely to buy a product if they have a personal connection to the brand. They also want to use their purchasing power to reward brands that demonstrate empathy and understanding. In fact, more than 70 percent of shoppers say that a company’s values play an important role in purchasing decisions.

First, you must identify what value your brand provides for the customer. Consider using loyalty points, free samples with purchase, or access to exclusive content to encourage customers to complete the identified next best action—whether that is making a purchase after abandoning their cart, signing up for the loyalty program, or completing another high-value action like downloading the app. For each of these, highlight how this will benefit the individual customer and why they should take the desired action. For example, you could highlight how many points the customer would receive if they converted on their abandoned cart. If that purchase would put them into the next loyalty tier, you can call that out as well.

Second, as brand loyalty increasingly becomes predicated on a brand’s values, try highlighting societal or environmental initiatives in your marketing communications where applicable. For example, localize content to highlight community initiatives your brand has contributed towards, or highlight the number of items recycled from resale projects or carbon savings from electronic vehicle deliveries.

Extend the In-Store Personal Touch to Your Digital Channels

While in-store shopping might still be fairly limited due to COVID-19 precautions, retailers should not minimize the power of a personalized digital shopping experience to drive brand loyalty. Bridge the gap between the personal approach of an in-store associate and the comfort of digital channels by offering online consultations, live chat functionality, or personal shopping appointments. Leverage real-time data to bring live appointment availability into customer communications, and add handy add-to-calendar reminders. Not only will this add a personal touch, but with real-time data, you’ll ensure that customers never see information or availability that is out of date.

Lean on Alternative High-Value Perks, Like Free Delivery

Free delivery is increasingly becoming more of a conversion driver. In fact, a recent survey found that nearly half of customers ranked free delivery as the leading digital purchase driver, beating out promotions (39 percent). When applicable, be sure to highlight your free delivery option and the value proposition. For example, if a browsed, carted, or recommended item qualifies for free delivery (i.e., it exceeds the delivery threshold), be sure to advertise the benefit when re-targeting the product. If the customer’s cart value is below the threshold, consider dynamically showing the remaining spend required to qualify for free delivery.

Don’t Underestimate the Power of Convenience

Although cost and value are certainly factors in a customer’s buying decision, 66 percent of shoppers say that they’re willing to pay more for a great experience. By making the shopping experience as convenient as possible, you’ll encourage more customers to convert. Some tactics to cultivate a seamless, best-in-class experience include flagging recently abandoned or browsed products outside of the expected trigger message, layering on helpful, high-value communications regarding delivery information, inventory levels or rewards accrued if the purchase is completed, and reminding customers to rebuy replenishable items in a timely fashion with dynamic and personalized reorder CTAs.

Capitalize on Changing Shopping Patterns

Related to convenience and delivery, consumers want to get their hands on their purchases quickly. The pandemic forced many consumers to try new fulfillment methods, such as buy-online-pickup-in-store (BOPIS), and those have now become integral components of the supply chain. If a consumer has browsed a product, or left it in their cart, one reason might be that they don’t want to wait for it. Through a rich push notification or dynamic content in an email, you can inform them that the specific item they have shown interest in is available in their local store. To take it a step further, you can show in-store inventory levels to convey to the consumer that the store visit will not be in vain and that they are guaranteed to find their product.

Keep Personalization Top of Mind

Promotions and sales are an inevitable part of the retail game, and are valuable sales drivers for retailers, especially around key seasonal events like Black Friday. This begs the question: how can retailers trade effectively through those seasonal events without falling back into regular discounting habits? In these instances, preserve brand integrity and product value by personalizing discounts, making the incentives appear more relevant. Consider positioning the discount as a time-bound, private event, or adding a flair of exclusivity by only including the promotion details or code within an email. To add another layer of personalization, tailor promotional messages to customer behavior by highlighting recently browsed categories or favorited brands that are included in the promotion.

As retailers continue to strive to convert customers into loyal shoppers, these strategies can help inform and execute a new game plan that doesn’t hinge on promotions and discounts.

Julio Lopez is the director of client strategy, retail lead at Movable Ink, a platform that helps digital marketers create personalized visual experiences across email, web, and display.