“Sales” = Sales

How to boost your retail operation using discounts.

No matter the size of your operation, I am sure you’ve found yourself seeking new strategies to boost sales and attract new customers. There are a lot of strategies that marry marketing and sales in the B2C market but one of the most effective tools is the discount. 

The concept of offering discounts does not need to be a gimmick; you and your business are providing quality products. Discounts, however, can be a strategy grounded in consumer behavior and sales psychology. Let’s dive into why discounts can be such a strong driver of higher sales and how understanding consumer interest in discounts can transform your business’s bottom line.

The Sparkly, Shiny, SALE

Consumers love discounts—it's a universal truth. According to a study by RetailMeNot, 80% of shoppers actively seek out sales promotions before making a purchase. This eagerness is not just about saving money; it’s also about the perceived value they receive. When consumers believe they’re getting a good deal, their satisfaction with the purchase is higher, which can lead to increased loyalty and repeat business.

The concept of perceived value is crucial for turning a prospective buyer into a customer. Simply put: a discount makes a product appear more valuable because consumers are conditioned to associate lower prices with better deals. This perception can lead to a sense of urgency, often encouraging more immediate purchases. In fact, a study by McKinsey & Company found that customers who believe they’re getting a good deal are 30% more likely to make a purchase compared to those who don’t.

We know, we know. It sounds slimy to put it so plainly. But it doesn’t need to be. If your business provides a pleasant experience with good customer service and quality products, the perceived value from promotional pricing converts to REAL value in the eyes of your customers. 

How Discounts Drive Higher Sales

Increased Purchase Frequency

When consumers are offered discounts, they are more likely to make purchases more frequently. Let’s say a retailer is offering a 20% discount on all items in-store. This “sale” can entice customers to buy products they may have otherwise put back due to price. 

You get it, right? We’ve all been there. 

“If I get this book from my local bookshop on their 15% off day, I can afford another book purchase next week!”

According to a consumer survey conducted by Deloitte, 58% of shoppers said they were more likely to purchase from a retailer that frequently offers discounts.

Higher Order Value on Average

Storewide and product sales prices often lead to higher average order values. Shoppers are more inclined to purchase extra items than they intended or upgrade their choices when they know they’re saving some money. The National Retail Federation (NRF) compiled data that indicated 66% of consumers tend to buy more than they initially planned when they encounter a discount or product promotion. 

Attracting New Customers

Discounts are a great way to attract new customers. 

Picture it: You’re walking the mall on a rainy Wednesday evening. Your outdoor plans got squashed, you’re stuck inside, and… actually… the mall is looking pretty drab. You start making your way back to the exit when you come across a candle shop offering 40% STOREWIDE. You don’t need any candles but… at this price, it might be nice to get a few new ones! 

Sales, special offers, or discount events draw attention and drive traffic to your store, shop, or site. According to a study by Harvard Business Review, discount promotions can increase customer acquisition rates by up to 25%. That’s a lot when you consider the above scenario: 1 in 4 people walking by will be converted into customers! Plus, once new customers experience the true value of your products, they are much more likely to return when your products are returned to full price.

Implementing Discount Strategies

When you’re looking to maximize the benefits of discounts, make sure to consider the following strategies:

• Limited-Time Offers: Create a sense of urgency with limited-time discounts. Flash sales, event promotional pricing, or one-day-only sales on a certain section of your store can spur consumers to act quickly to avoid missing out!

• Offer Personalized Discounts: With many POS systems having built-in customer data collection, it is now easier than ever to personalize discounts to your customers. Leverage data like most frequently purchased items to offer customized discounts based on your customers’ behavior. Doing so can enhance their loyalty and likelihood of making additional purchases! 

• Bundle, Bundle, Bundle: Encourage customers to buy more by offering discounts on bundled items. Do you want to sell more bottles of the locally-made honey you carry at your tea shop? Offer a buy one, get one 50% off sale or offer bottles at 25% off with any loose leaf tea canister purchase. Bundles not only build bulkier purchases but can also provide customers with a more well-rounded shopping experience in your shop. Not only can they now try your tea, they can pair it with your expertly-suggested sweetener for a better overall drinking experience!

• Loyalty Programs: Incorporating discounts into your loyalty programs rewards repeat customers and encourages continued shopping. It’s really that simple! From punch cards to points systems, these tools are about as Customer Retention 101 as you can get! 

The Bottom Line

(Sales. Get it?)

Discounts are more than just a marketing tactic; they are a powerful tool for driving high sales numbers and fostering customer loyalty. By tapping into your customers’ (and prospective customers’!) natural desire for savings and leveraging discount strategies, you can improve your sales figures and attract new customers.

If you’re not sure where to start, we’d love to help. Let’s hop on a call to discuss your next big sale and how to spread the word!