How to Structure a Winning Promotion Strategy to Drive ECommerce Growth
Customers are always on the hunt for the best deals and promotions, whether it’s back-to-school sales, buy-one-get-one offers, or 20% off all kitchen appliances. For platform operators and retailers, mastering promotions is key to unlocking growth and avoiding stagnation. When executed effectively, promotions can drive customer retention, boost sales, and strengthen brand loyalty. However, they can require extensive manual work and be difficult to manage and align with multiple stakeholders.
Why are promotions important for eCommerce?
Promotions are not a new concept in the retail world, they have always been a critical component of any successful eCommerce strategy. The overarching goal of sellers on every marketplace is for customers to buy from them. As a marketplace operator, you need to support these goals as best as possible. A well-planned promotional strategy is a win-win-win for marketplace operators, sellers, and customers.
Operators can showcase great deals to attract more customers and boost conversion rates. This also presents an opportunity to involve sellers, making themselves a priority and nurturing those valuable partnerships.
Sellers can also boost conversion rates and increase sales thanks to more visibility.
Customers benefit from good deals on great products.
Bottom line: promotions grab customers' attention, encourage purchases, and create consistency throughout the year, keeping customers engaged and loyal to your brand. However, one common challenge faced by retailers is the manual processes involved in creating and unifying promotions across multiple sellers. This is where platforms can streamline the process, making it more efficient and effective.
Promotions as a key driver for customer retention
In today's market, consumers expect promotions. Research from Forrester reveals that 54% of consumers expect to receive discounts when making a purchase. A well-executed promotion not only attracts new customers, but also retains existing ones by enhancing their overall shopping experience. Promotions have a significant impact on customer loyalty – when customers know they can expect great deals, they're more likely to return, driving long-term loyalty.
Common types of promotions
Promotions come in various forms, each tailored to specific goals and customer preferences:
Sale Events: Seasonal sales are the most popular type of promotion, with 88% of eCommerce businesses planning promotions around events like Black Friday. These events create urgency and excitement among consumers.
Dynamic Pricing: Some 41% of eCommerce businesses reduced prices using dynamic pricing algorithms. This strategy ensures competitiveness and maximizing revenue as retailers are seeing customers across the spectrum become more choiceful and discerning, which includes buying closer-to-need.
Night Campaigns: Many businesses with physical stores and an eCommerce strategy leverage night campaigns to maximize sales even during non-business hours.
Brand and Category Campaigns: Periodic campaigns focusing on specific brands or product categories can drive targeted sales and engagement.
Scarcity Effect: Limited-time offers or exclusive deals can create a sense of urgency, encouraging customers to act quickly to secure a deal. This strategy also evokes a sense of exclusivity and value, as individuals who secure the exclusive deal gain a benefit not accessible to everyone.
Seller-led Promotions vs Operator-led Promotions
There are two dominant models for running promotions on a platform business model: seller-led promotions and operator-led promotions.
Seller led promotions are initiated and led by sellers but hosted on the operator’s site. They may do this to follow a larger strategy and unify promotions across selling channels. These promotions allow sellers the flexibility to cater to their specific audience, leveraging their unique brand identity to maximize impact.
Operator led promotions are initiated by the marketplace owner. These campaigns help align promotions between owned inventory and third party seller products. This type of promotion helps with brand consistency and can help unify seller participation.
To capitalize effectively on these promotional models, having the best tools and platforms to run any type of promotion is crucial. Such tools can streamline the creation and execution of promotions, and offer valuable insights and analytics. This enables marketplaces and sellers alike to adapt and grow in a competitive space.
Best practices for running promotional campaigns
To maximize the effectiveness of your promotional efforts, consider these best practices:
Empower sellers to run their own promotions, aligning strategies with your overarching goals. This not only boosts sales but also fosters collaboration and creativity. However, make sure you have the right tools to moderate interactions with your sellers and stay in control of the promotions that go live in your marketplace.
Align promotional strategies with sellers without spending hours of manual work creating, communicating, and moderating your campaigns. Engage sellers and enhance their visibility of your promotions calendar to encourage their active participation and maximize their sales opportunities. This approach elevates the final customer experience, ensuring it is smooth and consistent.
Leverage promotions year-round rather than limiting promotions to peak seasons like Q4 or Black Friday. By planning promotions throughout the year, you can maintain consistent customer engagement. When leveraging promotions year-round, it’s good practice to tailor promotions to your industry.
How Koçtaş effectively executes promotions with Mirakl
Koçtaş is a Turkish leader in the DIY and home improvement industry. They have over 35 years of experience in their industry and have leveraged an online marketplace to expand their offerings since 2017. Their marketplace offers over 500,000 products from over 1400 sellers, serving their market with endless options. Additionally, Koçtaş has embraced a variety of promotional strategies to cater to their seasonal categories’ needs. By utilizing Mirakl’s platform, they've saved significant time and improved communication with their sellers.
“Previously we communicated with the sellers by phone and email, and now we can communicate with them with a single email via Mirakl. When we wanted to reach a hundred companies, we spent approximately 13 hours just communicating and providing information, but now we only select the stores and launch with the campaign announcement format," said Ceren Çolak, sales support specialist at Koçtaş.
Here are a few of the promotional tactics Koçtaş uses to power its promotions strategy:
Night Campaigns: Koçtaş runs promotions during non-business hours to capitalize on online traffic, leveraging innovative ways of reaching consumers.
Seasonal sales: Koçtaş runs seasonal sales aligned with indoor projects in winter and outdoor activities in summer, catering to their customers' needs.
Brand and category campaign: Koçtaş, may run a monthly promotional campaign on the bathroom category to attract specific customers looking to renovate their bathrooms.
The Mirakl platform leverages advanced features that streamline the promotion process, enhance communication, and drive growth. Marketplace operators can create campaigns by easily choosing participating sellers and setting conditions directly within the platform. This tool gives sellers visibility into the marketplace operator’s full campaign strategy, allowing them to prepare in advance and maximize sales opportunities. This eliminates the need for cumbersome manual communication and simplifies the process, giving operators greater control. Mirakl’s solution also empowers sellers to initiate promotions, allowing them to offer discounts, bundles, and more.
Start building your promotions strategy today
Promotions are an essential driver of growth for eCommerce platforms. By understanding the importance of promotions, exploring various strategies, and implementing best practices, retailers can enhance customer retention, increase sales, and create a seamless shopping experience. Mirakl's advanced features provide a solution that simplifies the process, empowering sellers and operators alike. Contact Mirakl to begin elevating your promotional strategy today.
