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Will Discounts Hurt My Ecommerce Business?

Will Discounts Hurt My Ecommerce Business?

Discounts and promotions can boost ecommerce sales. It’s a tried and tested approach for many businesses. But, looking at the long-term, can it be detrimental to your company?

Striking the right balance between maximising sales and building a reputable brand can be hard. That’s why it’s important to think of the potential lasting effects of discounts on customer loyalty. Read on to find out if special deals are the best direction for your brand and if promotions can work in the long-run.

Undervaluing your hard work

Building a stronger brand can pay off in more ways than one. It can create more revenue, customer loyalty and certain ecommerce yearly expectations. However, when adding constant offers and price cuts it can undervalue your hard work.

The worry is that it will devalue the company’s brand. Slashed prices can give the impression of reduced and inexpensive products. This isn’t always the case and can give your customers the wrong idea. It will look like your business is solely focused on short term sales, rather than long term success.

Can promotions ever be a positive?

It’s not the reduced costs that are the problem, it’s the way you apply them. Nancy Smith, founder and CEO of Analytic Partners, says that “price promotions make sense within a long-term and holistic strategy that builds back the brand’s strength.”

So, discounts don’t always have to mean bad news. Why not try promotions and value-add offers instead? This creates a lower limit for your ecommerce site, without devaluing other non-promotional products and increase overall profits.

Whilst increasing profitability, promotions can also be a fantastic way to strategically plan for the low points in each season. This can entice news customers to have another sneak-peak at products they missed. And, an excellent way to reward your loyal customers. You can build brand recognition and allegiance by giving something back to those faithful followers.

Big ecommerce businesses, like Amazon, do this successfully. They have excellent deals with a quick and easy checkout – not to mention speedy delivery. This clear direction and consistency, even with discounts, shows that it can be done. And can be done well.

But, is it bad for long-term business?

However, not everyone can be at Amazon’s level of commercial success. That’s why you need to do what you can to keep those customers loyal. And if you’re adding discounts regularly, it may subconsciously make customers question the quality of your products. Which is definitely not a positive!

Also, if you’re continually using discounts it can be an indicator that your pricing might be too high. Shoppers will come to expect discounts and will wait for them before they make their orders. Conditioned only to buy during sale seasons, customers are more likely to switch between brands.

Striking the right balance between reward and valuable branding is a tight rope. It’s hard to woo customers, but if they only come for sales or if you offer steep discounts it might be cause for concern.

Put your business first

If your ecommerce store is offering discount after discount, Fluid Digital can help. We create high-performing Magento ecommerce websites that make the most every opportunity to convert interested visitors into new customers. Get in touch today and chat to our friendly team of web design experts. We look forward to hearing from you.

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