How to run successful festive promotions for your online shop

The build-up to Christmas is a busy online shopping period. In this article creative and cultural individuals and organisations can learn about:

• Different types of promotions
• Key timings in the festive period
• Ingredients of a successful online promotion

Seasonal Ranges

The simplest form of promotion is to highlight ‘New in’ or Seasonal Ranges, without offering any additional incentive to purchase.  The purpose of the promotion is to simply draw attention to a range of products in a timely manner – get the right product in front of the right customer, at the right moment.

Doing this well in the festive season is the key to financial success. Think about highlighting

• Christmas cards – these are often the product that starts to sell earliest, e.g. in November or even before!
• Festive decorations – for the dinner table, home and even garden
• Festive foods – for gifts and for hosting
• Gifts for children, foodies, book lovers – think about different people and price points
• Anything in festive colours or patterns
• Anything for wrapping up at winter – nice scarves, jumpers, blankets

Gift Vouchers and Memberships

Don’t miss out on the opportunity to promote your gift vouchers and memberships. Everybody has that tricky person they can’t quite find the right present for – vouchers and memberships can be the magic answer!  Presented nicely they can be a real money-spinner, make sure:

• The product page highlights the key benefits of the voucher or membership, including any details on validity
• The wording you use in banners, newsletters and social media highlights it as a perfect gift
• Include good quality photos or graphics on your product page
• Make sure any digital voucher has an appealing design and is formatted for email

Most eCommerce platforms offer the ability to sell vouchers and memberships as digital products –  this means nothing needs to be posted – so you can keep selling and promoting vouchers and memberships right up until Christmas. No need to worry about last posting dates!

Delivery Offers

There are many studies that highlight how much customers dislike paying for delivery. To combat this sentiment in the run-up to Christmas, creative and cultural individuals and organisations can use delivery offers to drive online purchases.

The most common promotions are around ‘Free Delivery’. This can be a powerful lever for driving sales, but must also be treated with care. The safest way to offer Free Delivery is with an order threshold. For example ‘Free Delivery on all orders over £40’. In this instance you’re incentivising customers to spend a little more on their order and improving conversion rate by offering ‘Free Delivery’.

It’s important to state which delivery services this offer applies to, usually this will be an offer that applies to UK standard delivery only. The appropriate threshold for Free Delivery will vary by organisation. The idea is to set a threshold that is slightly higher than your existing Average Order Value to ‘pull up’ customer spend.

You should check your costs and product margins carefully to make sure orders at the threshold are still profitable. Here is an example calculation for a ‘Free Delivery on all Orders over £40’ offer:

Threshold Order Value	£40.00
VAT	£6.66   (VAT @20%)
Cost of Goods	£16.66 (Gross Margin @50%)
Cost to Pick and Pack	£1.20 ( Labour and packaging)
Delivery Cost	£3.00
Profit	= £12.48

This calculation suggests that for this example, a £40 order would still be profitable and deliver a net profit of £12.48 before any overheads or marketing acquisition costs.

If you offer a Next Day Delivery service, you may like to consider a parallel delivery offer with respect to this service, for example ‘Free Next Day Delivery on all orders over £80’. This offers another strong pull to increase Average Order Value. Running the two offers in combination is a powerful way of boosting customer spending on your website.

If you do have an Express Delivery service, in the last few days before Christmas, you may want to be tactical and use it to really drive some sales. Once your last posting date for standard delivery has passed, you might consider bringing your threshold for Free Next Day Delivery down to a lower value, in order to maximise orders in the last few days before Christmas. As above, you should check your costs carefully, to ensure orders at the threshold are still profitable.

‘Percentage-off’ offers

Most eCommerce platforms such as Shopify, or WooCommerce have the ability to offer a ‘percentage-off’ discount. These can be offered across a certain category of products, for example, “15% off all books” or can be offered across all products “20% off everything this weekend”.

The larger the discount offered, the bigger the uplift on sales volumes, however these sales will be at a lower margin. Your organisation will need to calculate what percentage discount you’re able to offer which still results in sales being profitable. When calculating this, you’ll need to take into account the cost of the goods, the costs to pick, pack and ship goods to your customers, as well as any other overheads.

As a rough rule of thumb, a 10% discount will get some reaction – generally from customers who were already interested in buying something from you, the additional discount prompts them to act and buy now.

A 20% discount, if well communicated, will get a strong level of reaction. It will entice customers to visit your site and see what they could buy, at this great price. In this instance you’re trading-off a lower margin on sales, against a greater volume of customer orders.

Through testing you can learn what % discount levels generate the most profitable response for your business.

Percentage-off discounts tend to be one of the most common promotional tactics, as they’re quite straightforward to communicate to customers and to set up in the back-end of your eCommerce platform.

How to set up a percentage-off discount

• Generally a percentage-off discount is set up as a time-limited discount code in the back-end your eCommerce platform. You’ll choose which products, or product categories, the discount will apply to. You can also set any specific exclusions, for example preventing the use of the discount code for purchases of gift vouchers.
• You will then publicise the percentage-off discount code on your website, via your email and social media channels. With this in mind, it’s a good idea to choose a short and catchy discount code. For example: “COOLYULE20” might offer 20% off site wide.
• In terms of the time limit you set for a percentage-off offer, this is a balancing act between running a promotion for long enough for enough customers to be exposed to the offer, but also offering a tight enough window, that a sense of urgency is conveyed and customers are incentivised to act and buy now. In practice this means the sweet spot for running a percentage-off promotion is generally between three to five days. Again, through testing you’ll be able to establish what works best for your creative or cultural organisation.

Other Product Discounts

There are also other discount formats that can be offered against products, however these can vary in terms of complexity to set up and communicate to customers. These include:

• • Offers with a £ value threshold. For example “£X off a purchase value of £Y” or “X% off a purchase value of £Y”. This is commonly used to drive up Average Order Value. For example £10 off all orders over £80.

Offers with an order value threshold can feel ‘safer’ to run, as you’re protecting your profit margin of lower value orders, however they will also tend to have a lower impact as they’re only relevant to customers willing to spend higher amounts.

• • Multibuy offers. There are many permutations of multibuy offers, such as ‘Buy 1 get 1 free’, ‘Get 3 for the price of 2’, ‘Buy X and get a Free Y’ etc. These are offers which tend to work well in traditional retail such as in a gift shop but are much harder to translate well in an online environment.

In a physical shop it’s very easy for a customer to see what products are part of the offer, whereas online that’s not the case. Implementations of this type of offer tend to require pop-ups in the basket, labelling on category pages, or other solutions. If your organisation runs this type of offer in its physical outlets, it’s worth exploring if you can offer an alternative promotion structure, which is better suited to online.

Timing of promotions

When running any promotions, timing is key. You’ll need to think about when you run your promotion and for how long. There are a few obvious dates around which you can hang a promotion, these include:

• Black Friday – this falls the day after the US holiday of Thanksgiving, which is celebrated on the 4th Thursday of November. For many people on a monthly pay cheque, this also coincides with their last pay before Christmas. For this reason special offers and discounts are widespread over this weekend. The best promotions to focus on are percentage-off discounts.
• Cyber Monday – this is the busiest online shopping day and falls on the Monday following Black Friday. It’s therefore common to run promotions that launch on or just before Black Friday and close on or just after Cyber Monday.
• 1st of December – as December arrives, the countdown to Christmas begins. Customers become more focused on their remaining Christmas gift shopping and it can be a great time to promote any seasonal ranges or Christmas special offers.
• Your last order date – This is the last date customers can order with you and expect items to arrive before Christmas. It’s good to promote this date along with any Free Delivery offers you may have, in the week ahead of this date, with a final push in the days just before the cut-off.

Planning for a successful promotion

The key ingredients for planning a successful promotion are:

• The offer – an appealing offer for customers, that has been agreed on with your internal teams. You need to decide on a validity period and any Terms and Conditions. You’ll need to check how your eCommerce platform can be configured to support this offer. For example an offer might be:

“ 20% off all Christmas Decorations with code: DECO20 ”

Valid from Thursday 1st Dec to Midnight Monday 5th Dec.

• The landing page – you’ll need a page where customers can see all products that are included in the offer. You’ll need to set this up in your eCommerce Platform. Ideally the landing page will also have a banner which repeats the key message of the offer.
• The communication plan – you should identify all communication channels through which the offer can be promoted. You should try to secure exposure via these channels with your respective teams. Key channels typically include:

• • Homepage of your online shop
  • Homepage of your broader organisation
  • Email newsletters
  • Social media channels
• Careful wording – think about how your offer can be described, which conveys it in the most impactful way. Example wording includes:

• • X % off ALL Xmas Decos
  • Up to % off Xmas Decos
  • Xmas Decos from £X
  • FREE Delivery on all orders over £X
• Good graphics – for each of the communication channels and for the landing page you will need good graphics to communicate your offer. These should be clear and visually appealing and include the text of any discount code that must be applied.

Graphics are typically supplied as a .jpg image file, which is resized to the appropriate size for each communication channel

• Extra juice – beyond these basics there are ways you can squeeze extra juice from your promotions.

• • Use reminders – these can be sent by email, shared on social media, and updated on web banners. For example “Ends Midnight Tonight – 20% off all Xmas Decos”
  • Use countdown timers – including a countdown timer on the landing page, these can increase customer conversion rates
  • Stack discounts – If you have both a Free Delivery offer and a product offer, you could test combining both messages in your communications.
• Good Housekeeping – both before and after running a promotion there are certain matters of good housekeeping to bear in mind.
  • Before a promotion
    • If you’re considering running a big promotion which could attract considerable customer traffic, significantly more than your usual traffic, make sure you discuss this with your web agency or development team.
    • Make sure you test all the links and discount codes. Make sure they’re all working before you release them into the wild! If you can, ask a colleague from another department to check whether the promotion is easy to understand and follow, from a customer perspective.
  • After a promotion
    • Make sure that all promotion codes have expired and that all promotional graphics have been removed from the website.
    • Evaluate the success of your promotion. What was the uplift in revenue compared to the same days in the previous week or in the same week last year? What happened to your traffic, conversion rate and average order volume? Which communication channels drove the most traffic and revenue? How did the promotion affect your operations – did you manage to ship all orders on time? Was there any increase in customer enquiries?

What’s next?

If this article has piqued your interest in running promotions in your online shop, the Digital Culture Network is on hand to help. Our Tech Champions can provide free 1-2-1 support to all creative and cultural individuals and organisations who are in receipt of, or eligible for, Arts Council England funding. If you need help or would like to chat with us about any of the advice we have covered above, please get in touch. Sign up to our newsletter below and follow us on Twitter @ace_dcn and LinkedIn for the latest updates.