Drive Sales Without Mass Discounts

In the new era of ecommerce, retailers face growing competition to win customers.

Shoppers often buy less and split their purchases into wants versus needs, forcing marketing to work harder to engage them. At the same time, online sales channels are proliferating fast, and shoppers can easily discover prices for everything they want to buy.

For many consumers, price is the most important factor that determines where and when to shop. This trend often pushes retailers to compete by running sitewide sales, also known as promotions. Promotions, when they are strategic and efficient, can be incredibly effective in driving value for retailers.

For many consumers, price is the most important factor that determines where and when to shop. This trend often pushes retailers to compete by running sitewide sales, also known as promotions. Promotions, when they are strategic and efficient, can be incredibly effective in driving value for retailers.

However, this competitive landscape has led retailers to rely on promotions and discounts as their go-to strategy. While promotions have the short-term benefit of increased sales, relying too heavily on discounting tactics can negatively impact long-term growth and profitability.

Consequently, retailers are discovering they need to pull back on sitewide sales – but aren’t sure how to change strategies without upsetting their conversion and profitability goals.

Modern AI-based tools unlock new ways for retailers to individualize incentives. These AI tools enable brands to reduce their reliance on sitewide promotions while still improving conversion and margin.

This ebook provides an introduction to this artificial intelligence and explains how retailers can best use it to move away from mass discounts.

Promos, discounts, coupons, sales: Whatever they are called, promotions can be very effective in driving value for retailers. Here are several of the most important ways that retailers benefit from promos as a sales strategy:

Certainly it makes sense for most retailers to use promotional strategies. Among all the above benefits, however, it is important to note that most do not require the discount be offered sitewide. Targeted offers – directed just to some potential customers – could have the same positives.

Just as the benefits of promos are clear, the disadvantages can’t be ignored. Large-scale discounts can lead to long-term trouble.

For retail marketers, mass discounts can be like an addiction: they appear great at first, but eventually they create problems. Here are several of the most important ways that retailers suffer when they come to rely on price reductions as a sales strategy:

As valuable as promotions are, there are definitely reasons to deploy them carefully, not to overuse them, and to ensure they have the right commercial benefits.

What retailers must do is make the most out of every promo dollar. Above all, they must pursue promo strategies that can drive the important conversion and topline revenue benefits without the extensive risks of mass discounting.

One answer is to shift strategies from sitewide promotions to targeted incentives, which offer the same benefits with fewer risks.

Moving from sitewide promos to targeted incentives takes some preparation. Frequently, this new strategy is championed by a head of ecommerce, a CMO, a head of operations, or an executive with responsibility for innovation. At a high level, the following five steps are needed for any retailer to make this transition:

The entire transformation process can be accomplished in a matter of months, with transparent reporting of the benefits. Where blanket discounts can still be helpful – such as in advertising – they will remain. Where targeted incentives are more efficient – on the site itself – they will take the place of most sitewide promotions.

The ability to achieve this business transformation has become possible due to the latest advances in AI technology.

New advances in artificial intelligence make it possible to segment site visitors, select the visitors who would benefit from an incentive, and deliver that incentive in real time. Other technology approaches could not take these important steps or do them nearly as well for several reasons.

Targeted promotions – driving sales without mass discounts – represent a new capability of modern technology to create topline revenue, higher conversion, and other critical commercial benefits for retail brands.

As consumers continue to price shop and look for discounts, marketers will need to work harder to engage them. Mass promotions and discounts have become the go-to strategy for many ecommerce businesses, but the short-term benefit of increased sales is often outweighed by the impact on long-term growth and profitability.

As this ebook has demonstrated, the solution to sitewide discounts is targeted incentives that maintain the benefits of discounting with few of the disadvantages. Retailers can replace most of their blanket discounts with targeted incentives that boost multiple critical metrics.

Session AI delivers a critical technology, in-session marketing, that enables retailers to make this transition from mass discounts to targeted promotions. For forward-looking brands that embrace modern technology, in-session marketing demands a close look.

Session AI is the pioneer of in-session marketing, the critical capability online retailers need to convert site visitors in a privacy-first world. Using patented artificial intelligence, Session AI predicts purchase intent in five clicks, enabling online retailers to provide each visitor with the right offer in real time. Major brands rely on Session AI to increase revenue and engagement without the need for personally identifiable information or third-party cookies.

Ready to learn more about Session AI? Connect with our team today.