Level Up Your Promotional Sales Strategy

Let’s be honest: Who doesn’t love snagging a new coat for 25 percent off? Consumers expect promotions from retailers — it’s a market reality exacerbated by the current economy. However, brands trying to maintain reputations and margins can’t pin their entire sales strategy on promotions.

In addition to cutting into margins, perpetual sales promotions negatively impact the brand. Customers are smart. They’ll quickly figure out they can wait for a sale rather than paying full price. Overemphasizing pricing and discounts tells customers to use the rational side of their brain rather than the emotional side, lessening their emotional attachment to the brand. A focus on price also reduces the perception of quality.

So, how can retailers balance fulfilling customer wants and business needs? The answer is a multipronged approach combining customization, added value, and loyalty incentives.

Pillars to Adjusting Promotional Strategies

Pricing and savings are leading factors in consumers’ willingness to buy, but they're not the only considerations. Personalization, order fulfillment, returns, and loyalty programs also factor into purchase decisions. Brands must combine all these elements to create a holistic promotional strategy.

Here are some approaches:

1. Deliver one-to-one personalized promotional messaging.

Blasting a generic storewide sale message is quick and easy, but many consumers will disregard it as “just another promo” email. Seven in 10 consumers expect personalized interactions. Use a consumer’s browsing habits, loyalty status and past purchases to tailor featured deals. This customization signals to the recipient that the content and promotion were chosen for them, creating deeper feelings of loyalty.

2. Expand the value exchange.

Move messaging beyond financials toward mutual value for a customer and the brand. Retailers can elicit high-value actions directly related to customer lifetime value in exchange for savings or benefits, such as incentivizing profile completion or app downloads by providing a discount in return.

In addition to markdowns, consumers value other ways brands help with their finances, such as buy now, pay later (BNPL) and buy online, pick up in-store (BOPIS). These tactics drive engagement and conversions by meeting the consumer where they are in their financial journey.

3. Leverage membership programs and loyalty-based promotions.

More than three-quarters of consumers say loyalty programs make them more likely to buy from a brand again. Retailers can capitalize on this tendency by clearly demonstrating to customers how to leverage their memberships.

Motivate customers to earn points by tailoring product recommendations to their preferences and showcasing the points they could gain. Encourage burn behaviors by communicating how members can redeem available offers, such as automatically applying rewards to show the lower price.

4. Lean into pricing elasticity to selectively target promotions.

On-site behaviors and zero-party data illuminate a consumer’s price sensitivity. Retailers can leverage this information to move beyond blanket promotions and instead showcase full-price items within the shopper’s preferred price range.

5. Use AI-powered marketing.

Customers can be motivated by a discount or compelling content. Finding a way to capture their interest with content will reduce a brand’s reliance on discounts. Artificial intelligence-powered analytics enable quality, customized messaging by processing vast amounts of customer data to predict a shopper’s needs and preferences. With these insights, companies can understand a customer’s entire shopping journey to make personalized recommendations that resonate with each individual.

Leaving Blanket Promotions Behind

Personalization frees retailers from their dependence on discounts. However, manual processes cannot achieve the level of customization necessary to win over shoppers, especially as audiences and customer demands grow. Brands are increasingly turning to AI to automate processes and optimize content. AI-powered tools enable brands to deliver truly exceptional, personalized experiences at scale, contributing to a balanced promotional strategy that satisfies customers while maintaining brand reputation and profitability.

Julio Lopez is the retail strategy vice president of Movable Ink, a company that combines the power of AI and automation to personalize every customer engagement.