Three common ways to operate e-commerce activities!

Sales volume is the core goal of e-commerce operations , so a very important part of e-commerce operations is to sell goods, sell goods to more users, sell more goods to users, and sell more expensive goods to users. Promotional activities are one of the main ways for e-commerce to sell goods.

This article is the 4th in the event operation series, talking about promotional activities and how to sell goods.

1. Promotional activity target logic

The goal of the promotion is GMV sales, which can be broken down into:

Sales = Number of consumer users * Average order value * Consumption frequency

The number of consumer users is the foundation, the effective consumer user scale of e-commerce products, and the users who undergo consumption conversion. The basic goal of promotional activities is to convert more users into consumption and increase the number of consumer users.

The average order value is the average amount of user orders, reflecting the user's purchasing power. The average order value can be further broken down into the number of items in the order * the average unit price of the items. Therefore, there are two ways to increase the user's average order value in promotional activities: one is to let users buy more items, and the other is to let users buy items with higher unit prices.

Consumption frequency, which can also be understood as repurchase rate, reflects user loyalty. The higher the purchase frequency, the greater the consumption value contributed by the user. Promotional activities can also effectively increase the user's consumption frequency.

The above are the three main ideas for the design of promotional activities:

1. Improve user conversion and bring in more consumer users;
2. Increase the number of products consumed by users and the unit price of products, resulting in higher average order value;
3. Improve user retention and repurchase, resulting in higher shopping frequency.

Of course, promotional activities usually meet multiple of the above ideas. Each promotional activity hopes to increase user conversion by promoting users, and then further consider increasing user average order value and shopping frequency.

The design of a promotional activity includes products, discounts and gameplay. Products and discounts are the foundation, satisfying users’ consumption needs and improving consumption conversion. Gameplay is a tool, amplifying the value of the activity and guiding user behavior, which may be to buy more, buy at a higher price, or buy more times.

2. Common ways to play promotional activities

According to the target focus and form characteristics of the promotion activities, the common promotion activities can be divided into three types:

1. Improve conversion

The rules for conversion-enhancing promotional activities are straightforward, and the threshold for users to enjoy promotional discounts is low. They are effective for single products and are often used to stimulate users to quickly convert consumption or cultivate users' consumption expectations and habits. It can be further divided into direct subsidy activities and flash sale group buying activities.

Direct subsidy activities directly provide price reduction discounts for a specific range of goods. Users can enjoy the product discounts unconditionally, and the price advantage can be used to increase user conversion consumption. They are suitable for high-budget subsidy promotions or small-scale subsidy traffic diversion. However, such promotions need to focus on strengthening the price discount and authenticity.

Flash sale and group buying activities create a sense of scarcity and urgency of product discounts by forming multiple teams and selling flash sales for a limited time and quantity, thereby strengthening price advantages. They are suitable for short-term promotions or promotions of low-priced products. This type of promotion needs to pay attention to the user's participation threshold while ensuring the strength of the discount, and control user expectations to reduce free-for-all behavior.

2. Increase customer order

Promotional activities to increase customer orders focus on increasing the number of items or the amount of consumption by users through promotional discounts, thereby increasing the amount of user orders. It is also the most common type of e-commerce promotional activity, and its gameplay is also richer. It can be divided into full-discount and full-item discount types, full-item discount types, and full-item gifts and additional purchase types.

Activities such as discounts and full-discounts have a monetary threshold for users to enjoy the discount. A single order must reach the threshold amount before it can enjoy the promotional discount, such as a 30 yuan discount for orders over 200 yuan and a 20% discount for orders over 300 yuan.

Generally speaking, full-discount activities have more usage scenarios and are suitable for medium and high-priced goods, while full-discount activities have fewer usage scenarios and are more suitable for medium and low-priced goods. When users participate in promotions for full discounts or full rebates, they will have the mentality and behavior of "combining the order" to reach the discount threshold, but there is also the risk of giving up the purchase due to difficulty in combining the order. The design needs to reduce routines and provide product options in multiple price ranges.

The full-item discount activities limit the number of items that users can enjoy the discount, thereby increasing the number of items users consume and the order amount, such as 20% off for purchases over 3 items, 1 free item for purchases over 5 items, and any 3 items for 99 yuan.

This type of activity is suitable for high-frequency consumption and stockpiling products. It can quickly increase product sales and spread fulfillment costs through quantity advantages. The number of items in a discount promotion must be in line with the user's consumption cycle and habits, and should not blindly pursue quantity.

Activities such as giving away free gifts or adding to purchases increase the number of items or total price users consume by adding gifts or discounts. The added gifts and purchases provide differentiation opportunities, increase the fun of the promotion, and help increase users' motivation to participate, such as giving away xx for purchases over 200 yuan, giving away xx for purchases over 5 items, and exchanging xx for 1 yuan for purchases over 500 yuan.

The items offered as gifts or exchanges determine the attractiveness of such activities. Popular brand limited edition items, customized peripherals, and first-launched new products are often used as gifts or exchanges to create an enhanced scarcity effect.

3. Increase shopping frequency

Promotional activities to increase purchase frequency focus not only on converting users’ single purchases but also on increasing users’ long-term active consumption. This type of promotional method often uses pre-hook reservations and post-reward incentives to increase users' subsequent orders. It can be further divided into order cashback, multiple order prizes, and combination coupon package types.

Order cashback activities focus on rewarding users for their single consumption behavior. After placing an order, users will receive red envelope coupons that can only be used for the next consumption. The consumption behavior at that time is its sunk cost, which to a certain extent increases the user's attention to the order reward and helps to place orders again in the future.

Multiple-order prize-winning activities are post-rewards for users' multiple consumption behaviors. Users can get rewards if their multiple consumption reaches a certain threshold. The number of consumptions before reaching the goal is the user's sunk cost, which makes it difficult for users to give up and thus continue to consume.

Combination coupon packages are now very common. Users pay or participate in tasks to obtain multi-coupon combination coupon packages. The recognition of the value of the coupon packages and the cost of obtaining them make users more likely to use them after obtaining them due to loss aversion, which in turn drives up shopping frequency.

3. Dilemma of Promotional Offers

It is not difficult to see that common promotional activities are mainly based on preferential incentives, which increase users' consumption motivation through real or fake product discount subsidies and bring more order conversions.

However, preferential subsidies are unlikely to become a driving force for users to continue consuming, and the effectiveness of promotional activities is getting worse and worse. Apart from the supply chain product power, what other ways are there to enrich the gameplay of promotional activities and improve the effectiveness of promotional activities?

In addition to conventional gameplay, promotional activities are often enhanced through node binding, form packaging, and gameplay combination. The main form is the common holiday promotion, which combines time nodes to strengthen users' awareness of discounts, increase lucky draw blind boxes, and develop gamification packaging to enhance the playability of activities and magnify the value of discounts. Multi-gameplay combinations are saturated marketing that satisfies users with different characteristics and preferences.

Furthermore, in addition to using discounts to increase the conversion of users' known consumption needs, another idea for promotional activities is to stimulate users' potential needs and create new user needs. This promotional idea can be implemented through scenario-based activities.

What is scenario-based? Focus on the specific consumption needs of user segments and carry out targeted scenario design, such as eating hot pot in winter and ordering midnight snacks at night. The core of scenario-based activities lies in discovering user needs and building scenario-based activities, which will make users' eyes light up and think, "Hey, I have this kind of consumption need", use scenarios to trigger consumption, and reduce dependence on discounts.

The above shows that e-commerce is here to stay and promotions are endless. It is not easy to do business and sell goods. Smarter and more effective promotions are long-term themes.

Author: Wu Yijiu

Source: Growth Corsair