An In-Depth Guide To Creating an Effective eCommerce Promotion Strategy For Your Brand

Are you an eCommerce business owner looking to convert a higher percentage of your traffic and boost your revenue? An effective eCommerce promotion strategy can help you do just that.   

Potential customers are always on the lookout for promotional offers or deals. In fact, more than 92% of online shoppers always, usually or sometimes search for an offer or a deal when shopping online.

And that’s not all. A survey by RetailMeNot found that two-thirds of consumers have made unplanned purchases after discovering a discount or coupon, while 80% are willing to try out a new brand if it offered them an offer or deal. 

Let’s explore the main types of eCommerce promotion strategies, the benefits of using them, and the best practices you can follow to get the most out of your promotional campaigns.

What counts as an eCommerce promotion strategy?

An eCommerce promotion strategy refers to the use of tactics like discounts, coupons and free shipping to attract potential customers, increase conversions and bolster sales in your online store.

eCommerce promotions are a component of digital marketing, which aims to build brand awareness, engage with the target audience and drive desired actions.

In addition to eCommerce promotion strategies, digital marketing encompasses a broad range of techniques, including content marketing, email marketing, influencer marketing, social media marketing and search engine optimization (SEO).

So that’s what counts as an eCommerce strategy. Now, we’ll take a look at the different types of eCommerce promotions you should consider trying out on your online store.

Types of eCommerce promotions

There are seven major types of eCommerce promotions. Let’s take a look at each of them in more detail.

Discounts

A discount is an eCommerce promotion strategy that allows customers to purchase a select product at a lower price than they would normally pay. For example, you might have a deal like “Get 10% off X Item For This Week Only” listed on several product pages to entice customers.

Discounts offer several advantages. First, they are automatically applied when customers check out, making it hassle-free for them.

Discounts are also one of the most versatile forms of eCommerce promotions. You can use them to achieve a wide range of business goals, including attracting new customers, retargeting and re-engaging old customers and clearing out inventory. 

Finally, they offer flexibility in that you can target them at specific customer segments, e.g., first-time shoppers, or you can provide them to all of your customers.

Coupons

Coupons are promotional codes or vouchers that customers can use to receive discounts when making a purchase in your eCommerce store. They consist of alphanumeric codes that a shopper enters during checkout to apply the discount to their order.

Coupons can be distributed through various marketing channels, such as email campaigns, social media platforms or affiliate marketing platforms. 

This has an added benefit—by distributing different coupon codes through different channels, you can track where the majority of people are discovering or engaging with your brand and, therefore, where to focus most of your marketing efforts or marketing budget.

Free shipping

Free shipping removes a key additional expense for customers during the checkout process, providing a strong incentive to complete a purchase. 

In fact, most customers now expect free shipping as a standard when doing online shopping. One survey from Shippo reveals that 62% of website visitors won’t shop from a retailer if free shipping isn’t offered. 

In another survey by Digital Commerce 360 and Bizrate Insights, free shipping topped the list of conditions that are most likely to lead a customer to place an order on a retailer’s website.

A strategic move that could lead to more revenue and potentially more profits for your business is to offer free shipping on orders above a specific amount. This incentivizes customers to add more items to their shopping cart, increasing the average order value. 

A survey by InMar Intelligence revealed that up to 78% of customers are willing to spend more to qualify for free shipping.

Loyalty programs

Loyalty programs encourage customer retention and help create more loyal customers by rewarding them for repeat purchases.

Customers earn points for each item bought, which they can redeem later for discounts, free products or special offers.

The accumulation of points with each purchase serves as an incentive for customers to check out more often and motivates them to continue buying from your brand.

Gift with a purchase

This involves offering a gift with the purchase of another item. For example, the gift can be a small, low-margin or slow-moving item you want to clear out.

Offering gifts alongside purchases can bolster conversions since customers have to check out first to receive their gift.

Contests

Contests are a promotional tactic whereby you offer customers the opportunity to win a prize (usually a big-ticket item) by completing a particular action. The action could be filling in a survey form, providing an email address, leaving a testimonial or sharing a social media post.

Holding contests on your eCommerce website can benefit your business in several ways. 

For instance, asking people to share a post from your store’s social media page for a chance to win a prize can increase brand awareness and drive more traffic to your website.

Meanwhile, collecting email addresses will help you build an email list that you can use to share useful content with your customers, provide access to exclusives or share promotions and discounts. 

Referral programs

A referral program is an eCommerce promotion strategy that incentivizes customers to refer friends, family and colleagues to your online store by offering them a reward. 

For example, you could offer shoppers a small percentage off their next purchase or store credits for each successful referral that leads to a sale.

Referral programs are great for lead generation. And most of the leads they generate have a high likelihood of converting. Since your customers already use and enjoy your products, those they refer your business to are more inclined to trust their recommendation and, as a result, to make a purchase. 

In fact, personal recommendations are the most trusted advertising channel among consumers with nearly 90% of people saying they trust word-of-mouth recommendations from friends and family.

Now that you’re familiar with the different kinds of eCommerce promotions, let’s cover the main benefits of an effective eCommerce promotion strategy.

Benefits of an eCommerce promotion strategy

1. Increase conversions and boost sales

According to data compiled by Ruler Analytics, the average conversion rate across industries is 2.9%. In other words, nearly 97% of people leave landing pages without purchasing a product.

If you think about it, this isn’t entirely surprising—a lot of online shoppers usually need some sort of final push to proceed with a purchase, especially if it’s not something they absolutely need.

This is where promotions come in. A discount or even free shipping could be just what a hesitant customer or prospect needs to pull the trigger. 

Case in point: A survey by Wildfire Systems found that 82% of online shoppers are more likely to complete a purchase if they can use a coupon or a discount code.

In a nutshell, an effective eCommerce strategy can help with conversion rate optimization and lead to more sales and revenue.

2. Attract and acquire new customers

Promotions provide a powerful marketing tool for expanding your customer base. 

Consider a referral program. It motivates your existing customers to share your products and services with others within their network. This helps you reach individuals who would otherwise be unaware of your brand.

According to FriendBuy, brands can acquire between 5% and 15% of their new customers through a powerful referral program. 

Other types of promotions, like discounts, can also reach new prospects via word of mouth or social media and encourage them to try out your brand.

Encourage repeat purchases and increase customer loyalty

Offering exclusive discounts to returning customers, personalized offers based on past purchases and special rewards for reaching certain milestones makes your customers feel appreciated. 

As a result, they are likely to buy from your business again in the future or stick with it for all their future purchases.

In a Wirecard survey, 75% of customers said they were likely to make another purchase from a brand after receiving an incentive. 

Clear inventory and avoid losses

Unsold or slow-moving inventory can tie up valuable resources, including capital and storage space. If the goods end up not being sold, it can lead to losses.

To get rid of such items, you could offer them to customers at a discount. It’ll help you minimize any potential losses but more importantly, it’ll free up valuable storage space that you can then fill with newer, more popular items.

Collect customer data and information

Some eCommerce promotion strategies provide an opportunity to collect valuable customer data and gain insights into consumer behavior. 

For example, contests that require customers or prospects to fill out opt-in forms will help you acquire useful customer information like email addresses, preferences and demographics. 

A survey by BCG found that up to 90% of customers are willing to share their data if provided with an incentive in exchange, like a discount on new products.  

You can use the information and data you collect to inform your future digital marketing campaigns and strategies, like crafting highly personalized customer offers.

Tips for creating and implementing an eCommerce promotion strategy

An effective eCommerce promotion strategy requires careful planning and execution. Follow these best practices to maximize the impact of your promotions and drive meaningful results for your business.

Set clear, measurable goals and objectives

Start by defining clear goals and objectives for your eCommerce promotion strategy. 

For example, do you want to improve sales, acquire new customers, increase customer loyalty, clear inventory or a combination of these?

Having well-defined goals will help you make better decisions, such as selecting promotions that align with your overall business objectives.

For example, loyalty programs are one of the most effective tools for bringing customers back to your store. A 2019 survey by Bond revealed that 79% of consumers said loyalty programs influence their likelihood to continue shopping with a brand.

Segment and target the right audience 

Some customers might respond to certain promotions better than others. For instance, first-time consumers are more likely to be swayed by a discount than loyalty points.

Instead of running blanket promotions for all customers, define a target audience for each type of eCommerce promotion. 

To do this, segment your buyers into different groups based on their preferences, buying behavior and motivation. Use the promotions for each group that best resonate with them or that provide the most value.

Monitor profit margins

While promotions can spur engagement and drive eCommerce sales, make sure it’s not at the expense of your profit margins. Before you launch any promotion, crunch the numbers to evaluate the impact it’ll have on your margins. 

For example, calculate the discounts you can realistically afford to give. Your goal should be to strike a balance between offering attractive promotions that increase engagement and sales and maintaining healthy profit margins.

That said, there are times it might make sense to accept less profits or even losses in the short term in exchange for long-term gains.

This is especially true if you’ve just launched your eCommerce brand and are trying to build a customer base. Here, you can offer big discounts to prospects to convert them into actual customers. 

Once they’ve bought their first product, you can employ other promotional and marketing tactics—such as redeemable points for each purchase—that don’t include offering discounts to encourage loyalty.

Another situation where it might make sense to accept lower profit margins or losses temporarily is if your goal is to clear out inventory. 

Say you’re stuck with a slow-moving product that you desperately want to get rid of. While heavily discounting this product can result in minimal profit margins or losses, it can free up precious storage space and allow you to introduce new products that have greater demand.

Draw inspiration from consumer behavior data

Leverage available research data on consumer behavior patterns to inform your promotional strategies.

Suppose you notice that your customers are abandoning carts at the checkout stage. Look at what research findings say about the main reasons for cart abandonment and compare them with what’s happening in your store.

For example, a survey by the Baymard Institute found that up to 48% of customers abandon carts when presented with unexpected costs like shipping or taxes. If this applies to your store, see whether you can offer free shipping to encourage customers to complete transactions.

Communicate promotions clearly

Clarity on your offers or deals can help eliminate ambiguity and confusion for customers. When customers clearly understand what they’ll get and the requirements (if any) they need to meet right from the beginning, it’s more likely to inspire action such as making a purchase.

Here’s an example of a confusing promotional banner on an eCommerce website:

 “Get up to 15% off select items!”—This promotion doesn’t state which specific items are included in the discount. Customers coming to your website might be unsure about the actual extent of the discount or whether it applies to the products they are interested in.

Instead of the above banner, you could have something like this instead:

“Get 15% off on all summer dresses and sandals!”—This promotion clearly states the exact discount customers will get and that it applies to summer dresses and sandals, leaving no room for ambiguity.

Be direct and precise when communicating offers to customers to increase the chances of conversion.

Keep the process simple

Closely related to communicating your offers is to keep the process simple. Essentially, reduce the number of hurdles or obstacles that customers have to jump through to access deals or offers, thereby improving the user experience. 

For example, if you’re offering discount coupons as part of your promotions strategy, provide coupons to them on-site rather than sending customers to their email inboxes or a third-party site. They might become distracted along the way and fail to return to your eCommerce site to complete their purchase. 

Time promotions properly

Present your offers or promotions at a time when customers are most likely to engage with them for maximum impact. That could mean, for example, planning your promotions around holidays, special events and other peak shopping periods when the demand for your products is high.

Final thoughts: Ultimate guide to creating an eCommerce promotion strategy

An effective eCommerce promotion strategy can work wonders for your business. It can attract new customers, boost conversions and lead to higher sales and revenue.

But to truly take your online business venture to the next level, it’s important that your store is hosted on a top-notch eCommerce platform. 

If your current eCommerce solution isn’t meeting your needs, you should check out Bluehost’s WooCommerce Hosting plans. 

With reliable hosting infrastructure, 24/7 support and a wide range of features designed to enhance your store’s performance, our WooCommerce Hosting plans work with your eCommerce promotion strategy to unlock your business’s full potential.

eCommerce Promotion Strategy FAQs