Discounts in retail - how to generate new sales and retain customers in your store

Discounts in retail - how to generate new sales and retain customers in your store

"What is the last price?" A question that is often asked on classified ad portals or at the local flea market. But bargain hunters who want to save money are also out and about in the retail sector. Discount promotions are a great way to lure customers into your store. From Black Friday and summer sales to gift shopping at Christmas, you have plenty of opportunities to offer discounts all year round. Why discounts make sense, what types of discounts there are and how you can use them as a targeted marketing tool? We'll tell you in this article.

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Date
17/1/2024
Author

What is a discount?

Discounts are price reductions on goods or services. They’re usually offered to customers for a specific period of time—such as during the winter sales, summer vacation, or on special promotional days like Black Friday. You can offer discounts on individual items or entire product categories—20 percent off everything except … you know what I mean.

 

What types of discount are there?

There are numerous different types of discount. Particularly well known are the volume discount when purchasing large quantities of goods and the loyalty discount for loyal customers.

From an anniversary discount to a staff discount for company employees only to a bonus point discount , pretty much anything is possible. With the journalist discount, there is even a discount that offers editors and press representatives certain benefits - for example when buying a car or booking a vacation trip. However, these professional discounts are now strictly regulated in order to prevent corruption.

 

How do I give a discount?

As a retailer, store owner, or business owner, you’re likely using a digital point-of-sale system. If not, you should change that quickly. That’s because a digital point-of-sale system offers numerous advantages, which we’ll cover in this guide . The point we’re making is this: Modern POS systems, such as the one from LocaFox, offer you various ways to provide discounts. Here’s an overview of the most common types of discounts in retail:

  • Location-Based Discount: Are you a florist, baker, or do you run a farm stand? Then your customers will usually buy several items at once—for example, different bouquets, rolls, or types of cheese. With the line-item discount, you can reduce the price of one or more items on the receipt and thus give the customer a discount. With the LocaFox point-of-sale system, you have three different options to choose from. You can choose between a percentage discount, a fixed-amount discount, or a completely new price that you set yourself.
  • Shopping Cart Discount: If you sell your products online, you can also offer your customers a so-called shopping cart discount. This discount applies to all items in the digital shopping cart. Here, too, you can choose between a percentage discount (e.g., 10 percent off for shopping carts totaling 500 euros or more), a fixed-amount discount, or a newly set price.
  • Customer-specific discount: It makes sense to keep a customer database - especially if you want to offer discounts. Here you can define an individual customer discount that will benefit the respective customer permanently. Of course, this specific customer discount can be changed or removed at any time. Customer-specific discounts are a clever way to retain customers in your business in the long term. The "preferential treatment" means that customers gradually identify more strongly with your business and are happy to recommend you to others.

 

Another way to give discounts is to create product labels in the back office of your digital checkout. At LocaFox, individual products can be assigned a special discount during a promotional week, for example. This discount is automatically deducted at the checkout and is applied to selected products - for example, during a summer sale (SSV), a new store opening or discount campaigns for certain product groups (for example, if swimwear and summer fashion is still to be sold in the fall).

 

Retail: Do discounts make sense?

The question remains as to why you should give a discount at all. After all, you are selling your goods below value, right? Not quite. In fact, discounts are a very effective marketing tool, especially in retail. There are several reasons for this:

  • You can attract new customers and increase customer frequency with targeted discount campaigns.
  • You offer new customers and regular customers a financial incentive to buy goods that they might not otherwise consider.
  • Customers whom you attract to your store with your discount promotion may even buy other products—or more products—than they had originally planned, in addition to the discounted items.
  • Discounts allow you to sell surplus stock that would otherwise only take up valuable storage and floor space.
  • Especially during longer discount promotions combined with customer registration, you'll gather valuable customer and contact information that can be useful for a newsletter or after-sales activities.

 

Slogans such as "Geiz ist geil", brands such as "GUT & GÜNSTIG" or the infamous "20% off everything except pet food" are the best proof: Germany is the land of bargain hunters and discount fans! Use the "power of discounts" to increase your sales and tap into new customer groups. With clever discount campaigns, you can literally often save yourself expensive marketing campaigns!

 

Still have questions? We have the answers!

Would you like to learn more about our digital point-of-sale system and discount options? We'd be happy to advise you personally and look forward to your call or message.

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