Top tips: Increasing online shopping basket conversions through discount vouchers

With further constraints on the UK economy, retailers are constantly looking for ways to strengthen their retail strategy. The worsening  economic  outlook from the government this week will make  consumers even more cautious about spending their hard-earned cash and advances in technology has  allowed consumers to take their high street browsing to the internet, researching products and looking for the best bargain before making a purchase.

In response to this, many retailers have started using vouchers, partly because they know they need to appeal to this more cost-conscious consumer, and partly because they feel obliged to keep up with many retailers that have a more advanced deal and offers strategy. Because of this, some retailers don’t have the optimum activity in place and aren’t using their onsite voucher codes in the most effective way. Voucher codes are often dismissed by retailers as a discount channel for fear of cannibalising sales, however if used correctly, they can drive incremental revenue, be effective in increasing online shopping basket conversions and driving sales and margin.

In order to have the best voucher code strategy, each merchant needs to consider the following questions:  what is the customer’s usual purchase journey? How do customers discover the voucher codes and where does the customer’s loyalty lie? How can we use technology advances or search to drive awareness of vouchers? And if the retailer has a voucher code box on their site, where is it placed in the checkout process? Is it fully visible or masked via a text link? And finally, what is the merchant’s strategy for capturing and converting sales from their prompted searches in the voucher term space?  With these questions answered, retailers can start to make meaningful changes to their retail strategy that will ultimately increase shopping basket conversions.

Why would you consider using a voucher code box? 

Experience shows us that online discount voucher codes can provide up to a 20% increase in consumer conversion rate and reduce cart abandonment rates to single digits*. A retailer’s strategy should include a wide range of offers targeted to their shoppers, based on a number of variables like frequency of shopping, AOV and products they usually purchase; so they can build in value add offers such as rewards points that incentivise regular customers or a voucher that attracts new customers and builds affinity with the brand, or product bundles that give a loyal customer an enhanced deal. For new customers, a site wide deal is a great introduction to interacting with a brand.

A generic deal can be used on all products and /or services on the site, offering a 20% discount on all orders over £100 and is a great way to entice a new shopper to buy, build basket value and from their first sale or shopping basket, identify potential new offers to entice them to return. Many retailers simply dismiss voucher codes as a discount channel without realising that codes can be co-funded with the manufacturer, allowing for example, a ‘7% off all Samsung products’ to be partly funded by Samsung . Voucher codes can be used as an extension of any co-funded activity, particularly where a retailer stocks multiple manufacturers for a whole raft of seasonal and tactical offers.

Most effective ways of using vouchers

Placement of the voucher code box in the customer purchase journey should be strategically positioned to incentivise the consumer to add to their basket and complete the sale.  Some retailers place the voucher code box only once the credit card details have been provided, which is probably too late in the customer journey to really add any volume or sales value, whereas other retailers place the voucher  on the order summary page to prompt the sales to be completed. Some retailers mask the voucher code box via a text link to ensure that only their more eagle-eyed, savvy shoppers spot the deal opportunity. Other merchants show a voucher code box but don’t even issue vouchers, instead always showing a comprehensive range of offers for their deal-sensitive customers to find.

Retailers must consider the consumer’s loyalty and where it lies. Is the consumer a loyal visitor to the voucher code site or do they arrive there through the relevant retailer’s search results? Having an understanding of how internet savvy the average customer is and their use of the voucher code ‘search/find/redeem process’, will provide this key information. For example, was the voucher code discovered through prompted search because the retailer had a voucher code box on their site, or was the sale generated from a more savvy-shopper who searched for the merchant’s voucher via their favorite voucher code site?

By considering these two major factors, changes can be made to a retailer’s online voucher offering.  Take the example of smart phone apps in the voucher code space, of which Vouchercloud has enjoyed much popularity in the media in recent months. If we consider the customer discovery /experience process, are users finding the store and then looking for an available voucher? Is the retailer giving something away for free? Or is the user finding the voucher first and then going in-store so that the voucher is actually driving incremental revenue?

One way is creating incremental sales… the other is cannibalising sales that they had already secured! Some retailers choose to recognise vouchers code redemption only when absolutely necessary. They achieve this by using different landing pages depending on where on the site the user has accessed, prior to visiting the retailer’s site e.g. offering only savvy shoppers via an online voucher site to the landing page where the vouchers can be redeemed. By contrast, vouchers can also be used to build loyalty; some retailers will only allow access to vouchers via a subscribed newsletter.

Whatever the intention of a retailer, when engaging the use of voucher codes they should always involve peer to peer activity which gives an extra level of credibility, and through technology advances and the rise of social media, is now possible with significant scale. Research shows over 16 million shoppers (34%) are already creating peer reviews online and 36% usually refer to reviews before making a purchase[1] so making deals shareable over various social media channels is an obvious development.

Which voucher codes are the most effective for conversion?

There are three types of vouchers that have proven to be consistently effective for increasing or maintaining conversion rates, although adjustments to external factors or the product or service category may need to be applied. A site-wide code that offers either money off or a percentage discount with a minimum of 5% offered, although it depends on the category of product and the margin available e.g. consumer electronics have smaller margins to play with compared to clothing retailers.

To gain effective conversion in a particularly competitive consumer category like clothing, offering a high percentage discount with a minimum spend for a short amount of time has proven to drive conversion.  The general rule of thumb is the higher the percentage, the shorter the sales period should be, with a minimum period of two days, e.g. 30% offered for 1-2 days and 15% offered for three to four days.

Free postage and packaging has proved to be a highly effective ‘catch –all’ for shoppers who are looking to achieve a saving, albeit a small one online, as the consumer  feels like they have gained something, regardless of whether the offer is combined with another promotion.

Voucher codes can no longer be looked upon in isolation as a solution for online retail as they drive shopping basket conversions. We have seen how they can be used strategically by retailers, using a wide variety of tactics depending on the individual merchant’s objectives.

Firstly, the objective must be agreed upon, such as using vouchers to reward loyalty, learn more about customers shopping habits, drive in-store or online traffic, create awareness or to simply offer better value for your most loyal of shoppers . The key is also to have a clear understanding of the consumer user journey for any particular merchant, from search/find/redeem; is it loyalty to the brand, a retailer or a voucher code site?

From here, key decisions and changes can be made to address conversion challenges. Whatever the policy, using voucher codes to drive incremental revenue should be an integral part of the retail strategy.

Sarah Escott is the UK Director of Retail Partnerships at Savoo.co.uk, one of the fastest-growing voucher code sites, which features offers such as Dell discount codes and Apple promo codes. Sarah’s commercial development expertise includes over twenty years’ experience at some of the UK’s biggest media organisations and working with leading, online retailer brands, including Hello! Magazine, BBC Worldwide, ValueClick and TradeDoubler.

Research:

Stats supplied from Savoo’s Top 5 merchants

About Savoo.co.uk:

Savoo.co.uk is a free, online voucher site that allows people to save on almost anything that they want to buy online.

Savoo.co.uk’s dedicated team of Deal Hunters scours the web to find top offers in every category, from designer clothes and baby gear to big screen TVs and gourmet food. Savoo.co.uk currently offers approximately 5,000 unique, active vouchers, with opportunities to save everyday on major brands, such as Apple, Amazon, Argos, Dell, Debenhams, Figleaves, Tesco, etc.  If consumers are too embarrassed to use vouchers in public, then Savoo.co.uk is also a ‘discreet’ way for them to save lots of money on all of their purchases.

Savoo.co.uk’s mission is to be a true consumer champion by offering consumers the straightest, simplest road to the best deals online, as well as by offering lots of exclusive deals. 

Visitors to Savoo.co.uk can add tips and great deals and become a Savoo.co.uk Deal Expert, earning the respect and admiration of fellow members. Or they can contribute to the community by voting and commenting on deals, which also lets the Deal Experts know they appreciate their savings savvy.

Savoo.co.uk is the perfect way to make day-to-day savings – and all without having to tackle the High Street.

Follow us on Twitter for the latest deals @Savoo

Become a fan of Savoo.co.uk on Facebook

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