Over the last year (or perhaps slightly longer), I've begun to see eTailers actually marketing their coupon codes on the TOP OF EACH PAGE of their website, essentially using the code as their "merchandising" effort to drive conversion to purchase. It's the holidays currently, so discounts and incentives are the norm, with eTailers activating them automatically.
Ask any eTailer (and even more so in this economy), and they’ll tell you that discounting and/or free shipping is simply the “cost of doing business on the internet during the holidays”. Outside of the holiday season, Banana Republic and all of their sister brands offer promotion codes front and center on their sites consistently:
15% off with any purchase of $50 or more. Click here for promotion code!
As well, I’m reminded as I browse their site that I receive free shipping as a LUX MEMBER, at all times. And further, everyone knows you can always find a discount for the Gap or Old Navy. So, now I’ve racked up the discounts and Banana is happy that I’ve converted to purchase. But this behavior not only reduces their margin, and degrades their brand value, but likely doesn’t even pay for itself.
- Have these web marketers gotten lazy about learning which products are most relevant or compelling to their audiences, allowing them to neglect traditional merchandising tactics and instead flash discount codes (i.e. wave money in front of the customer’s nose?) to try to entice the sale?
- Have the product merchandisers gotten lazy in their quest to find or develop products which their customers will find value in?
- Have the business owners gotten lazy about their pricing strategies, neglecting to build and HOLD pricing models which demonstrate value for their products vs. the competition?
- Or, have the customers simply won with their demands to get discounts on products?
One of the most critical tasks in brand management is in retaining the value inherent in your brand. Consider what you’re doing to that value when turning to discounting in exchange for the short term sale. What does this say to your customer? What does this say about the value of the product? More on brand management to come.