Promotions have always been an integral part of retailing. A powerful tool for

increasing traffic and sales for brands, promos are a key component of the modern

marketplace, and e-commerce is no different. As Black Friday approaches, the

biggest shopping day of the year and the official start of the holiday shopping

season, online retailers need to tap into the potential of promotions to increase

sales and strengthen their brands.

Driving eCommerce Traffic to Your Brand and Products This Holiday SeasonBy Rob White, Account Executive and Operations Specialist at One Click Retail

In looking back at our analyses of both Prime Day and the

Back-to-School shopping period on Amazon, we’ve found that

promotions drive sales to an impressive degree. On Prime Day, we

witnessed a striking correlation between the number of promos offered

and the percentage of total sales, and during the Back-to-School period

we witnessed promos driving sales lifts of up to 500%.

A note on the data: This analysis is based on a sample size of 400+ SKUs from some of the top manufacturers on Amazon during Prime Day (July 12), specifically measuring the effect of two major types of promotions: BXGY Deals and Lightning Deals.

What attracts consumers to Deal Days such as Prime Day, Black Friday and Cyber

Monday is the cost savings potential. Being a player at these strategic moments can

go a long way in driving traffic to your products and your online store. How exactly

you develop your promotions strategy will depend on what you’re trying to get out

of it. Begin by asking yourself these four questions:

• What is the purpose of my promotion?• How high can I discount my product without devaluing my brand?• What am I willing to pay for a promotion on a Deal Day?• Can I use other resources to drive traffic and sales?

#1 – What is the purpose of my promotion?

The types of promotion you use will depend on the purpose of your promotion. Are

you looking to increase sales in the short term, create a sustained lift in sales,

liquidate stock, or just drive traffic? Choosing between the short or long view will

affect your promotional strategy, specifically in regards to which of the two highest

performing deal types your should choose: Buy X Get Y, or Lightning Deals.

On Amazon, BXGY deals show on the items detail page, offering an additional free

product to consumers who make a purchase that meets certain criteria.

BXGY advantages include:

• BXGY deals drive more sales than Lightning deals, with a conversion rate 21% higher during

the promotion (2% for Lightning deals) and a 9% lift in sales (7% for Lightning deals).

• They typically require a larger purchase to receive the discount, driving an increase in the

average dollar per page view of 13%, in contrast to Lightning deals which saw a 6% decrease.

• They are more likely to convert already interested customers.

Buy X Get Y (BXGY)

Lightning deals appear on the Amazon deals page and offer a straight price discount on a

product, with no additional criteria needing to be met. Advantages:

• Lightning deals drive more traffic than BXGY, with an increase of 292% during the

promotion (252% for BXGY deals).

• The average dollar per purchase amount was lower than BXGY but the total number of

sales was higher, exposing the brand to a wider audience.

• The sustained lift in traffic for Lightning deals is measured at 28% (26% for BXGY deals).

Lightning Deals

Not all discount levels are created equal. In fact, too much of a discount can hurt

your sales as much as too little of a discount. Our analysis has allowed us to

identify the perfect discount amounts to get the most return from your

promotions. The majority of promotions during Prime Day were for amounts

above 20%, with over half of them falling between 31 and 40%. The sales

increase during the promotion compared to the previous 4 weeks was as follows:

#2 – How high can I discount my product without devaluing my brand?

Don’t throw away your budget on discounts below 20% since, as shown in

“The Top 5 Takeaways from Amazon Prime Day 2016 CPGs Need to Know”, they drive a

significantly smaller increase in sales compared to higher discount amounts. On the

opposite side of the scale, discounts above 50% actually show a lower return then

those between 20 and 50%. Offering too large of a discount can devalue your product

— retailers risk not only losing their profit margin, but also damaging their brand by

making their product appear cheap and open the door to arbitrage.

Not all retailers have the luxury of offering a discount of 30% or more.

Depending on what you’re selling and how slim your profit margins are, your

potential discount may only go so high before you start taking a loss on it. Still,

successful promo periods do drive a long-term lift in sales, averaging about 8%

in the first 4 weeks. Weigh the expected long-term increase in sales against the

lost revenue during the discount period when calculating your promotional

budget.

#3 – What am I willing to pay for a promotion on a Deal Day?

For example, Amazon’s Happy Belly Coffee items

used a combination of Buy X Get Y deals and Gold

Box deals offering a 35% discount, with the

following results:

Amazon promotions are an excellent way to expose your brand to

a wider audience, but they can also be a great opportunity to

build brand loyalty within your network and existing customer

base. Develop a strategy that combines promos with other

resources such as social media and traditional marketing to drive

traffic and sales to your brand.

#4 – Can I use other resources to drive traffic and sales?

Promotions are a powerful tool. They can help you build a brand, launch a new product,

give a second life to an underperforming item, drive traffic to your properties, or liquidate

surplus, unwanted or obsolete stock. Each of these goals demands a different promotional

strategy. As we approach the holiday shopping season, it’s important to plan appropriately

in order to get the most response (and the right kind of response) from your current and

future customers.

To get the latest and most accurate industry insights and reports, check out our weekly articles at

www.oneclickretail.com/insights, and follow us on Twitter and LinkedIn.

Final Thoughts

One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics and search optimization for brand manufacturers in North America, Europe and Asia. Thanks to our proprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracy is unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party business intelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and Home Depot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach and HP, rely on OCR insights to drive sales and profitability across eCommerce.

Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and other leading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based international B2B media company with a focused portfolio of market-leading events and information services products.

To learn more about how OCR can provide your brand with the competitive edge in today’s ecommerce marketplace, visit www.oneclickretail.com.

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