– By Kunal Tiwari
India’s festive season is a time that transcends mere celebrations. It is an experience that engulfs the entire nation, with diverse festivals like Navratri, Dussehra and Diwali bringing people together in a harmonious blend of traditions and customs. During this period, streets are adorned with lights, homes are decked up, and spirits are high. It is not just a time for prayers and feasts; it is a time when consumers eagerly embark on a shopping spree, seeking discounts and exclusive offers.
On average, discount campaigns help increase sales by almost 25%, with a 15% rise in customer acquisition. Many reports suggest that 70% of shoppers are more likely to purchase from a brand that offers discounts. And, 80% of these shoppers have a higher chance of converting into loyal customers.
As a result, discounts become the highlight of the Indian festive season as e-commerce brands gear up for the mega festive season and brands big and small ramp up their marketing campaigns and provide shoppers with unique discount offers that stand out. In a country where celebrations are exuberant, and shopping is an integral part of the culture, e-commerce brands have the opportunity to leverage this festive fervor to drive sales and boost their bottom line. However, doing it strategically is the key to making the most of discount offerings specifically during this period.
To ensure they stand out, brands unleash the power of discounts and offers. By strategically planning discounts and crafting attractive deals, brands can capture the attention of shoppers and entice them with irresistible deals.
During the festive season, e-commerce brands buzz with a plethora of discounted products. From electronics to fashion, home decor to personal care, consumers are spoilt for choice with a bouquet of exclusive discounts and deals. The mantra is simple – offer value, create urgency, and inspire action.
So, how does a brand ensure that the discounts they are offering have a positive impact on their profitability? This happens through smartly structuring different kinds of deals and “making the shoppers an offer they will be unable to refuse”. There are many different ways of offering unique festive discounts to shoppers that brings them closer to purchasing your brand’s products over your competitors.
Let’s take bundled discounts for instance. Bundled discounts are an excellent pricing strategy wherein e-commerce brands can offer multiple products together at a reduced combined price compared to purchasing each item individually. This means that if you are a fashion brand and the price of one Kurti is Rs 999 you can offer two for Rs 1499 and three for Rs 2499. Similarly, you can also offer free gifts with the purchase of a product of a certain value. For instance, if a shopper purchases beauty products worth Rs 999 they will get lipstick free, or if they purchase products worth Rs 1499, they will get lipstick and blush free etc.
These discount strategies are quite prominently used by e-commerce categories like Beauty and Personal Care, Fashion, Jewellery, FMCG, and Home Furnishing. The very nature of these discounting features is that they allow brands to increase platform traffic by creating a sense of urgency and excitement in the minds of shoppers. They also encourage higher sales with increased average order value and repeat purchases.
With high demand during festive season sales, cash-on-delivery orders surge too. This can lead to a higher RTO (return to origin – non-deliverability of COD orders) rate. E-commerce brands can curb this too by offering prepaid payment discounts to shoppers. For instance, an electronics brand can offer 30% or flat Rs 499 off on any electronic item (Mobile, Earphones, Wearables) purchased through a prepaid payment method like debit cards. This will also help increase cash flow, profit margins and overall revenue of the brand during the high-end festive sale period.
Apart from this, e-commerce brands can also offer exclusive festive discounts, offers and deals to their loyal customers to not only instill the spirit of festive sales but also ensure higher repeated purchases, and a greater sense of customer loyalty and satisfaction. This will also help in word-of-mouth marketing as happy shoppers will spread the good word about a brand that will stay on beyond the festive season sale period.
The impact of e-commerce discounts during India’s festive season on brand profitability is undeniable. By capitalising on the spirit of celebration, brands have the opportunity to drive sales, enhance brand recognition, and acquire new customers. However, it is crucial for brands to strike a balance between driving sales and ensuring sustainable profitability.
Discounts possess the power to create memorable experiences for shoppers and build lasting relationships, they truly add to the celebration of this time. By crafting compelling offers and delivering exceptional customer experiences, brands can maximize their profitability while leaving a lasting imprint in the hearts and minds of their customers. So, as the festive season reaches its prime, let us embrace the spirit of discounts, celebrate the joy of shopping, and witness the transformational impact they can have on e-commerce brands’ profitability.
(Kunal Tiwari is the Chief Product Officer at GoKwik.)
(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)