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Amid inflation and rising interest rates, many assumed that the economy has slowed shopping over the past year. Yet consumer spending has remained resilient—even surpassing some experts’ forecasts. Instead, these macroeconomic trends are transforming how consumers are shopping.
According to RetailMeNot, 53% of consumers now look for sale items first, then adjust what they buy according to discounts. As we move into 2024, one-third of shoppers plan to use sales and discounts even more.
With consumers in this new price-conscious mindset, small retailers need to flex their discounting skills. That being said, we know creating a promotion that’s both exciting for consumers and strategic for your bottom line can be challenging. But it’s not impossible.
Here, we’ll cover all the different types of deals and promotions your retail store can implement, why they’re important, and how to best prepare (and make the most of) increased foot traffic. With a solid strategy and smart pricing in place, you’ll be able to provide shoppers with deals they want—and increase your sales, visibility, and customer base in the process.
Why discounts are important
Offering a discount can be one of the most effective ways to boost sales. For example, discounts like Black Friday sales help make the holidays the busiest sales season of the year, accounting for 19% of annual U.S. retail revenue.
What’s more, discounting and having special offers can reward shoppers who already know your brand and attract new ones. They can also be beneficial to you: Perhaps you need to make use of older inventory or experiment with some newer marketing techniques.
To keep your store humming with visitors old and new, it’s critical to pay attention to consumer needs, especially if their habits are changing. If you don’t offer discounts to bring them in right now while they’re price-sensitive, you might miss out on their budget this year—and risk their loyalty down the line when they have more to spend.
Of course, you don’t need to wait for Black Friday to have a sale. Here are some ways to get started now.
Types of promotions
There are many ways to have a sale and not all of them require a straight percentage-based or dollar-value discount. Got extra inventory? Try a BOGO (buy-one-get-one-free). Is your neighborhood foot traffic lower at a certain time of year? Consider partnering with local shops for a group discount or provide a coupon exchange with your neighbors to keep by your register. If you don’t want to slash prices, you could offer a tiered discount with a spending threshold, like get $50 off $250 or $100 off $500 or more.
Don’t leave referral bonuses, personalized offers, and subscription programs just to e-commerce stores. You can communicate all of this info through email, social media, or signage in your store and have people shop in person to redeem their discounts.
Another useful strategy: Capitalize on shopper FOMO with a flash sale. Promoting a short-lived sale with low-stock items will create a sense of urgency (and scarcity) that’ll motivate consumers to shop before it’s too late.
Tips for smart discounting
Having a sale should not be a free-for-all for your customers. Or at least it doesn’t have to be. Here are some ideas to make your sales work for you.
Inventory
Lean into unsold holiday stock: If you have leftover celebratory gifts from the holiday season, consider how they might perform on sale for Valentine’s Day or another gifting holiday.
Bundle, bundle, bundle: If you have particular fast-moving products, pair them with slower-moving ones (like a popular deep conditioner and a more expensive fancy hairbrush). You could also discount a bundle of the same product, like offering a discount when someone purchases three candles. If shoppers are interested but not fully ready to invest in a more expensive item, pair it with something more affordable or offer a free gift to incentivize them to go for it.
Follow the trends: Make the most of the new travel wellness trend by bundling a face mask and TSA-friendly aromatherapy or put together a few board games for those looking to cut their screen time. See something going viral on TikTok? See what you can sell to capitalize on that excitement.
Timing
Capitalize on spring cleaning: As consumers start cleaning out their wardrobes and homes for the new season, be there to furnish them with something fresh (on sale!). A spring cleaning sale may just incentivize them to finally donate that bag of clothes that’s been sitting around and pick up something new from you.
Plan ahead: This is a loaded tip but an important one. If you’re able, at the beginning of each fiscal year, make a sale calendar. This will help you adjust your stock, make sure you have enough employees who are well-versed in your offerings, and pre-order any signage you might need. As you work out the details, think about what you want to accomplish:
- Do you want to grow your customer base or highlight specific products?
- What’s most valuable to your customers?
- What promotions have been successful in the past?
Addressing all of these questions will help you strategize and have a more fruitful promotion (since we know that every sale isn’t a one-size-fits-all for every store out there).
Think about sale cycles: If you’re not sure when to have a sale, look to larger retailers to see how they do it. There are end-of-year sales, holiday sales, and Black Friday. You can also lean into more personal sales, like your store anniversary and Small Business Saturday.
Pricing
Keep an eye on your margins: Use a margin calculator to make sure you aren’t losing money from your discounts.
Follow the Rule of 100: Developed by Jonah Berger, a marketing professor and author of Contagious: Why Things Catch On, this rule states that items under $100 benefit from a percentage discount, while items over $100 move faster with a dollar-off discount. Of course, this is where learning from previous sales could come in handy. If you’ve learned that your particular consumers get more excited about a straight percentage discount on all items, then that’s how you should move forward.
Don’t slash too much: Be sure you aren’t discounting so deeply that shoppers lose faith in a brand or product value. If they see an item for 80% or 90% off, they might wonder what’s wrong with it.
Marketing
Make the most of every purchase: Every time a customer chooses your store, you have an opportunity to build loyalty. With every sale, be sure to collect email addresses and even birthdays. This way you can stay in touch and keep your store top of mind for the next time your shopper wants to shop.
Use email marketing to your advantage: For the shoppers who are already subscribed to your store’s newsletter, reach out to let them know a sale is coming and include any items that relate to their sizes and product preferences. (The more customized the better!) Plus, when new shoppers sign up for your email list, offer them a small discount, like 10%, to incentivize them to make their second purchase.
Get social: According to Salesforce, between March and May 2023, more than half of consumers surveyed said they bought an item in-store that they first discovered in their social feeds. That means it’s time to promote your goods on social, whether you’re TikToking the latest concert couture outfit or doing an Instagram live with a local influencer.
It’s clear that deals will always be valuable and exciting for consumers. But delighting them (without compromising your brand or bottom line) requires some strategy. With the tips above, you should be able to navigate upcoming sales seasons—while building customer loyalty that’ll continue to show value in years ahead.
