Retail brands are reportedly set to ramp up promotions and discounts in the coming weeks as the impact of inflation takes its toll. According to a report by CNN in June, a number of US retail brands including Walmart, Target, and Urban Outfitters are sitting on unsold inventory as consumers have pulled back on spending due to rising living costs, as well as shifted their spending to new categories, away from bulky products such as appliances, for example.
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Heavy discounting often come with downsides for brand, of course. Just a few months ago, Marketing Week reported how brands including Superdry, Marks & Spencer, and Pizza Express are all veering away from discounting as a common practice due to the damage it can do to the consumer perception of retailers – eroding exclusivity, for example, or creating a lack of willingness to ever pay full price. If promotions are too many and too wide, brands can run the risk of putting customers off from buying full price in future.
So, with many retailers looking once again to promotions, how should they approach the strategy without damaging consumer perception? And what role can ecommerce UX play, from conversion to creating exclusivity?
Discount codes vs. automatic discounting
Discounts aren’t always made available to everyone on product listing and details pages, with some retail brands preferring to target customers with unique or time-limited discount codes that they can apply at the checkout. This, alongside personalised discounts (based on past orders or interests) can help to make customers feel valued and crucially keeps the higher or full prices in view on the ecommerce site.
Discount codes have other benefits, such as being used to track conversion performance of various channels of promotion.
With that said, manually entering a discount code can also cause friction – whether due to typos, expiration dates, or trouble locating the code entry box – and end up negatively impacting the customer journey. Furthermore, if a customer doesn’t know about a discount, they may not make a purchase they would be otherwise tempted to.
Which approach to take will depend on brand and product strategy, and the audience being targeted.