Sales Promotion in Online Retailing
Prepared By: Subba Reddy D042 Shivam Lakhanpal C037 Shreyansh Batia E005 Venkatesh G E011 Sadhya Patil E042 Nikita Singla E055 Ricky Sundrani E056
• • • • • Online retail market currently stands at Rs. 2,000 cr Less than 1% of the total retail market in India Likely to be worth Rs 7,000-crore by 2015 High CAGR of 35% 8 million Indians shopping online in 2012
• • • •
DRIVERS Internet & PC penetration Increasing use of credit cards Convenience Mushrooming middle class
Online Consumer Behavior
Demographic Variables Convenience Benefits Risk Decision
Why consumers buy online
Product Category Risk
Cash back guarantee Cash on delivery Convenience Better Prices Variety Free Shipping
Check out process User Experience No ‘Touch and try’ Fear of faulty products Security Inability to bargain Why consumers don’t buy online
Faster delivery times
.Types of Sales Promotions
Different promotions for each month of the year
Total order above $XX.XX = reduced shipping charges
Deadline promotions sent out via collected email lists / social networks
Develop some entertaining media (flash games. video.
coupons •identifying the product or products to be promoted. •conditions to be attached to the discounts. •amount of discount to be offered. •validity period of the e-coupon.E Coupons
Designing E. •writing descriptive text and creating graphics. Components Validity Period Absolute time Period Discount List Condition List Visual Design Elements & Descriptive text
. if any.
• Disadvantage: Unsolicited e-mail is not permitted in a number of countries and even permitted it is often unwelcome.Delivering E coupons
Login screen for web store
Enticement to register E-mail While browsing Web store When browsing other Web sites
a registered shopper could be offered a limited number of e-coupons in the Login screen
• the same e-coupon will be offered to all guest shoppers • Advantage: Method is that shoppers can reach customers even when not browsing through the store. • Offer e-coupons at appropriate moments while the shopper is browsing in the Web store • The offer can be set to trigger on specific shopper actions
• Google AdWords and Social Media
2&3 tier cities)
Short term focus
.Challenges of Online Sales Promotions
Awareness (only 10% .
Targeted Online Sales Promotion
• Google AdWords
Social Media Targeted Ads
Usage rates of E-coupons
Where E-coupons are redeemed
Communicating the offer
Samsung S 3 16 GB
FLIPKART • Emphasizes on offering Free Bluetooth headset and Free Home Delivery • Single Price Mentioned
SNAPDEAL • Emphasizes on Slashed Prices and Discount available
STAR CJ • Emphasizes on Slashed Prices and Discount available • Points available for online payment
indiatimes. Mid night sale on Foot wear
Other Promotions 08-03-2013
Surprise cash back offer to Customer wallets
20% off over 3999
. Midnight sale
Cash back available on NonOffered in OKTOBER fest Discounted Items Febmania.upto 5000 cash back with coupons-Easily redeemable. Myntra
Flipkart.Flipkart vs. Indiatimes vs.com % Discounts in several Products MYNTRA % Discounts in several Products Upto 40% Discounts on Levis Brands Clearance sale up to 70% on all products Coupons worth 1000 for signing up
Brandwise offers Clearance Sale Coupons Cash back
No such offer
No such offer
60% clerance sale on Clearance sale on Cooking Footwear Tops No such Promotion On several products Mass media coupons like FEBMANIA.com Discounts % Discounts in several Products Shopping.
giving equal importance to both
First page for most sites is filled with major promotions offered by them
New Price and Discount are mostly shown in Red color to communicate clearly to Customer
Old price is mostly in low intensity color to highlight New price When cash back is offered both price and amount of cash back are in same color.
offers from multiple ecommerce sites posted by users
Affiliate Fee to the Forum for every coupon redeemed through Forum on the ecommerce portal
Dispensing and communicating about coupons/promotions
Rs 50 10% with a max of Rs 350 Rs 35 / Rs 80 1% 1% 8% Rs 220 Rs 300
Does an average of 25-30 deals / day with the highest going to 200 per day depending on the deals
Companies are spending huge sums on new customer acquisition.com Snapdeal.com STARCJ.com when launched had a budget of Rs 500 for new customer acquisition
.com Pepperfry.com Flipkart.com Homeshop18.com Myntra.Commission Paid by various Sites
3 Main expense items for Companies
com still shipped orders even though it suffered losses
• Coupons meant for individual user leaked on public forum • Norton contacted all public forums to remove the coupon codes threatening to sue them
FreeCultr.Frauds and Misuses
• Rs 5000 off coupons valid on Furniture and other expensive items started being used on mobiles • Indiatimes.com
• Coupon code Flat 500 off leaked by one of the forum users • 50 orders were placed within 25 minutes • FreeCultr refused to pay commission to affiliate
Coupons meant for individual users are leaked out on public forums leading to misuse
Coupons meant for a particular category of items being applicable on another category leading to misuses and losses
www.Primary Research – StarCJ.
CJ O Shopping Co.com
Joint venture between STAR Asia and the South Korean home shopping major. Ltd.About StarCJ.5 cr.
Has a 24x7 home shopping channel called STAR CJ Alive and a website to reach the customers
Revenue through online sales – 1. per year. Revenue from online sales increased 5 times in 8 months
Budget for sales promotion – 3% of revenue. Objective: To make sales profitably and sustainably.
20 would be such products
These bring high volume.
. Sweepstakes –Answer questions and win.com
Types of sales promotion
Killer products – make 70% of the sales.Sales Promotion @ StarCJ.
Second are the products with high margins. Among 240 products. Discounts are given mainly on these 2 categories
Loyalty points based Highest times a customer makes a purchase becomes winner Contests.
1000 • They attach a cookie to the coupon to redeem the coupon on Starcj website
• Free of cost. Both benefit in some way.e.Continued
Redemption rate of online coupons i.0001% • For e. TV shows
Different promotional offers
• For different categories of goods according to the margin on products
. If they send mailers to 1.t.c.. For eg.com
Tie ups with brands.. had a promotion on Channel V show Dil Dosti Dance free of cost and they gave them gift vouchers and coupons for some talent hunts e. Renting of customer Customer Acquisition costs
• 0. there will be around 75 redemptions • Gift vouchers and cost of sending mailers • Around Rs.g.
For promotions on CouponDuniya.5 mn.
• Leakage of coupons. 4. Retailers buy multiple such products to sell them forward • For e.000 was leaked and retailers bought the products in bulk. They called the owner and he said that he cannot stop it in the future and it would be taken down if they send him a mail
. a coupon of Rs. tradus. When iPhone was launched.g when there coupon was leaked on couponduniya. Someone posts the coupon on a website.com .com. • Another e.g.
Brands do play a role even if the brand is promoted on the front page of the site Trade promotions have to passed on completely because of highly competitive market Online retailers use implicit ways to sell products below MOP and entice customers
Very difficult to sell products below MOP
.Differences between online & offline
Offline Online Customer Acquisition cost is comparatively Customer acquisition cost is difficult to easy to track track Brands play a role in Sales Promotions – POP and End of aisle display Option to pass on the Trade promotion In Online retailing.
Flat Discount on price In case of cash back
New Price is highlighted and Easily noticeable
With only EMI option
On Front Page
• No % discounts are mentioned
• % discounts are mentioned