5 ways DTC brands are ditching deep discounts this holiday season
Editor’s Note: This article was originally published on November 6, 2020. It’s been updated to reflect the most current data and insights.
Traditionally, Black Friday meant waiting in line at large retailers for sales with discounts up to 60, 70—and even 80% off—retail prices. But today, the Super Bowl of shopping events looks very different—and not just because the majority of it is now done online.
Most direct-to-consumer (DTC) brands are choosing to stick with more conservative discounts, averaging between 20-30% off. Other retailers are ditching the discounts altogether.
So, what’s the best strategy if you don’t plan to offer a discount this year—or, if your margins can’t compete with stores that promote everything at half price?
Here are 5 ways that brands are convincing customers to shop with them—and without relying on discounts—this Cyber Weekend and through the holiday season.
1 | Opt for product launches during the holidays
What’s more exciting than a discount? A new product. And with a new product launch, your customers may just forget all about Black Friday and Cyber Monday sales once they see what you have planned.
If you decide to go this route, you could follow in the footsteps of Beyond Yoga and launch an entire collection over the course of Cyber Weekend—keeping consumers on their toes with daily product drops.
Nervous that it may be too late to promote an entirely new product line? Check with your supplier to see if you’re able to make a variation of a current product, like offering it in a different color or size.
Great Jones made a splash when they released their best-selling cast-iron Dutch oven in a black and white version.
Hint: Position your launch as a limited-edition product to boost time sensitivity and create urgency for Cyber Weekend. This will encourage consumers to buy sooner than later, so that you can still meet your Q4 revenue goals without depending on discounts.
2 | Give a free gift with purchase
Shoppers are prepared to shop Cyber Weekend, armed with a list of all the people they need to buy gifts for this holiday season.
Want to sweeten the deal for those who are considering buying from your brand? Offer a free gift with purchase. They can decide whether they want to give it as a gift—or keep it for themselves.
Last December, Rastelli’s offered a “12 days of gifting” program, where customers received a different free food item with any purchase over a certain dollar amount.
Whether they’re getting salmon or steak, customers recognize the value of this free gift—and often plan additional purchases to take advantage of the perks.
“This campaign gave us an opportunity to tell a story about the brand,” Liz Santo, email marketing specialist at DMi Partners, Rastelli’s performance marketing agency, explained.
“We’ve also found that offering a gift with purchase helps expose our customers to products they might not have purchased otherwise, and we see a long tail impact in the frequency and revenue from future purchases. Additionally, it’s a great way to build excitement and to stand out in the marketplace. Everyone is having sales right now. I think sometimes the free giveaway, especially when it’s a product that’s typically premium or expensive, is really attractive to consumers.”
3 | Promote contests and strategic partnerships
Just because you don’t want to hand out a discount to everyone who’s signed up for your brand’s email list—that doesn’t mean you can’t build excitement with subscribers.
Huckberry generated buzz with a previous holiday campaign they dubbed “Huckberry’s Golden Holiday.”
This campaign consisted of 30 days of giveaways and $250K in prizes. Every day during the promotion, customers had the potential to win a prize, including a Casper mattress or a tent from Huckberry’s camping collection.
This was not only a great way to cap the amount of money that Huckberry’s gave away during the holidays, it also provided an opportunity to create strategic partnerships with other brands that share a similar audience.
Plus, customers had the chance to test their luck and possibly get even more than they might in a typical Black Friday promotion, whether it was a premium gift or a credit towards a larger purchase.
4 | Community building with brand content
Many brands are ditching the gimmicks and focusing on the well-being of their communities. Adding a personal touch to your marketing strategy by communicating empathy will help your customers feel more connected to your brand.
“We’re seeing customers react better—and spend more—around campaigns that focus on notes from founders, ingredient highlights, or brand transparency. For brands that can’t sacrifice margins with deep discounts, we’ve come up with alternative campaigns that provide customers with use-cases for buying in bulk,” said Gina Perrelli, director of CRM at Lunar Solar Group.
P.S. Snacks, one of Lunar Solar Group’s clients, connected with their customers when they offered up holiday recipes using their cookie dough.
“Instead of leading with a discount, we started with a note from the founder, adding some healthy dessert ideas for the holidays,” Gina explained. “We provided a discount when you bought a case—but we didn’t lead with that messaging.”
5 | Incentivize people to shop by donating to a cause
Instead of deeply discounting your products, why not encourage shoppers to make a purchase that includes a donation to charity? It is the season of giving, after all.
“Donation incentives can work in conjunction with smaller discounts during Black Friday Cyber Monday—or they can replace discounts altogether,” said Andrew Forman, CEO and Co-Founder of Givz.
Instead of offering 40% off their entire product catalog for Black Friday, Sheets & Giggles offered 20% off their products with a matching 20% donation to charity. With this strategy, Sheets & Giggles was able to raise over $12,500 benefitting 125 charities over Cyber Weekend.
“Giving people a discount along with the ability to donate real dollars to the charity of their choice has proven over and over again to increase conversion rate while building the brand up instead of tearing it down,” Andrew explained.” And this significantly improves the margin in the process.”
Dashing through the discounts
While Cyber Weekend is often perceived as a competition between brands to see who can offer the biggest and best discount, many marketers are realizing that they don’t have to sacrifice profit in exchange for a quick sale.
This holiday season, get creative when it comes to grabbing your customers’ attention while creating an enjoyable experience that may just increase your bottom line.
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