According
to new research from Vouchercloud, the majority of start-up retailers
and service providers in the UK begin providing discounts after two
years of trading, with as many as 63 per cent wishing they’d done so sooner.
The
Vouchercloud team analysed on-site data in order to determine that an
average retailer offering discounts on their products can generate an
additional three-figure increase in sales per month through providing
discounts and voucher codes, with the average basket size totalling £80.
Following on from this, 875 retail and service provider business owners around the UK, all
of which stated they had been running for at least two years and that
they were offering discounts to customers, were quizzed about how
discounting had impacted their business.
Initially,
all respondents were asked ‘How long after launching your business did
you begin to provide voucher codes/discounts for/on your products?’ to
which the majority of respondents, 51 per cent said it had been ‘after
two years’ of trading. However, 63 per cent of these respondents said
they wished they’d offered discounts earlier on.
All
respondents were then asked ‘What was your motivation for providing
voucher codes and discounts?’ When shown a list of possible responses
and told to select all that applied, the top five answers were as
follows:
1.Wanted to attract new customers – 74 per cent
2.Had to meet sales targets on a particular product / service – 61 per cent
3.Wanted to reward current customers – 58 per cent
4.Wanted to increase brand awareness – 50 per cent
5.To coincide with/boost new product launch – 32 per cent
All
respondents were then asked ‘Do you find that some discounts drive more
sales than others?’ Four fifths of respondents, 81 per cent, said
‘yes’; with respondents noting that the most popular deals were a ’20
per cent + discount’ (26 per cent) or ‘freebie vouchers/offers’ (23 per
cent).
Chris Johnson, Vouchercloud head of operations, commented:“Whatever
a company’s reasons for offering discounts and voucher codes, it’s
difficult to argue that it doesn’t work. Changes in consumer behaviour
has dictated desire for discounting over recent years, and with the
added incentive of a 25 per cent uplift in sales for brands when
utilising a discount-led channel, it should be a consideration for
brands who have historically been resistant to lowering margins.”
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