How to Drive E-commerce Sales Without Discounting

Your e-commerce business needs a boost in sales, and fast. What’s your first thought? If you’re like most e-retailers, you probably think to offer a discount; after all, nearly 127 million U.S. adults are projected to redeem online coupons in 2016, and several of your competitors probably offer discounts (in fact, last Thanksgiving, nearly 2/3 of the top 1,000 e-retailers offered discounts).

But wait- recent research shows that discounts may actually be counterproductive to your bottom line. As it turns out, the more you discount an item, the lower the perceived value in the eyes of the customer. Also, the boost in sales you get is only a short-term benefit. One study showed that supermarket sales of Cornflakes increased by 500% during a day of discounting- but once the promotion was over, they fell right back down to normal levels. The same study discovered that when one brand discounted their laundry detergent, their sales increased significantly; however, their competitors’ sales didn’t fall during the same promotion, and one competitor’s sales increased by 200%!

Instead of using discounts as a short-term fix for drooping sales, e-retailers need to address the underlying issues affecting sales. Research shows that most customers stop the purchasing process because of shipping costs, not being ready to purchase, slow site speed, and worries about site security. To boost sales, retailers can test strategies such as offering free shipping, sending abandoned cart emails, using retargeting strategies, improving site speed, and adding security logos to payment pages.

On the flip side, customers become more likely to buy thanks to consumer reviews, social media integration, and loyalty programs. Retailers should encourage customer reviews (which are trusted nearly 12x more than manufacturer product descriptions), and add ‘shop now’ buttons to social media pages to make buying easier. Finally, customers in loyalty programs spend about 13% more than average customers, and they can be especially effective for businesses that sell products that customers need to buy regularly.

So before you propose a new flash sale or heavy discounts, think carefully: will it really be effective as a long-term sales strategy? Chances are, probably not. Instead, focus your efforts towards making it easier for customers to buy by offering free shipping, loyalty programs, secure websites, and more.