While selling a product for full price may be the main goal for many brands, there are also many reasons why a brand would want to put their product on sale. It may seem counterintuitive, but putting your products on sale can actually help promote an increase in sales—a lower price point gains more interest and trial, for example.
But before you go slashing prices on your products, be sure to take in the full picture of what it means to put your product on sale, and how that can affect your brand overall. Let’s look at some best practices when executing an on-sale strategy.
Promotions and limited-time sales
Does anyone not look forward to scoring a deal on a shopping holiday? And by that, we mean the days or weekends when consumers know products will be deeply discounted. Think Black Friday, Cyber Monday, Christmas in July sales, Back to School, Memorial Day sales—you get the idea.
These are the days that brands rely on to generate sales and profit, and they often do so by offering their products at a sale price, whether big or small. Black Friday 2021, for example, saw more than 154 million people shopping for goods, with about 66 million in-store and 88 million shopping online. Shopping sales hit $8.9 billion on Black Friday alone. And while more than half (60 percent) of those sales were impulse buys, it’s safe to say that a number of the purchases made by consumers were for on sale products.
But how does putting your brand on sale for a limited-time event, or even just on sale in general, benefit a brand’s bottom line? In several ways:
- It increases traffic around your brand, whether that is in-store, online, or both.
- It attracts both new and established customers. New because perhaps they were waiting for your products to be at a price point they can afford, and established because consumers love a deal on products they buy regularly.
- It reduces your inventory. The more product consumers buy, the less you have to store, and in turn, the more room you have to stock new products. Additionally, if the products on sale are ones that weren’t moving before, you’re gaining some revenue from them, even if it’s not as much as you’d originally planned on.
Brands that decide to move forward with discounting or sale-pricing their products also need to keep in mind that the marketing behind these sales needs to be executed strategically in order to be successful. As sales may temporarily increase interest and cash flow to your business, you want to sustain that momentum even after the sale or limited-time discount ends and keep your customers’ loyalty strong.
Start by taking a deep dive into what you want to accomplish with your sale price. What is the end goal—a quick influx of cash? A new consumer base? Making room in your inventory for new products? Whatever it is, that goal will drive the type of sale or discount you offer. For example, lean on a buy-one-get-one (BOGO) offer if you’re trying to move stock that seems at a standstill. If you want to gain customers, putting multiple products on sale at once can help draw them in.
Once you’ve set your intention for the sale product, make sure you target customers accordingly. Are you hoping to gain customers who see your product as an indulgent treat? Or do you want more customers who shop with a value mindset? Understanding your brand, what it can offer—and what it can’t, will help you determine the audience you’re looking for. Use your analytics to determine when these customers want to be contacted with a discount or sale notice—were they recently looking at a specific product? Maybe they’re ready to buy, they just need an incentive, ie, a sale, to pull the trigger on the purchase.
Why you shouldn’t put your brand on sale
The benefits of putting your products on sale or offering them at a discount are many, but that doesn’t mean it’s the right strategy for every brand. Before you cut prices, be aware that discounting products can:
- Lower your profit margin
- Devalue your brand—especially if you’re running a sale on products too frequently
- Lead consumers to lower their perceived value of their brand
When done strategically, putting products on sale can be an advantage, rather than a hindrance.
Working with retailers to set sail on a sale
It would be nice if putting your products on sale was as easy as simply changing the price on your brand’s website. For those brands that sell their products in retail stores not under their own banner, it’s not quite as easy.
This is when having a strong relationship with retailers comes into play. See, retailers often have the same objectives as a brand when it comes to running sales—attract customers, increase revenue, build loyalty, to name a few. However, retailers need to consider the value of the real estate your products inhabit, and slow-moving products may come to their attention if they’re living in a prime location. One way to move that product is by discounting it or putting it on sale. Retailers do have the advantage of doing so on a larger scale compared to many brands.
It’s important to remember that working with retailers often involves costs and fees, which can impact your profits as well as your products on sale. Make sure you fully understand what you’re responsible for, whether your products are being sold at full price or at a discount to ensure you’re doing what’s right for your business and your brand.
Don’t discount the discount
Putting your brand on sale isn’t simply slashing your price for a day or three. In order to successfully sell products at a discount, brands need to strategize how, where, and when their products will go on sale to maximize the benefits of the sale.