Promotion to purchase in the Netherlands

From promotion to purchase

How the Netherlands’ top online retailers are engaging customers through promotions

Your customers are fickle.

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It’s unsurprising really; in the age of online shopping they have little reason to stick with one retailer over another. Any product they want to buy is there at their finger tips, with no barrier to finding the best deal. So how do you win their business?

IntroductionIn our previous report, ‘Brands we love versus brands we buy’, we used consumer research to get to the heart of how people shop online and the effect that promotions can have on their decision to purchase. Some of the key findings were –

• Half of online shoppers claim to only ever make a purchase when there is a promotion• Nearly a third (28%) spend more when a promotion is involved• Consumers prefer to hear about promotions on email and retailer websites

The research provided clear evidence of the power that promotions have in engaging online shoppers, driving sales and increasing conversions, so we wanted to put the spotlight on the Netherland’s top online retailers to see if and how they are using these. Are they tailoring their approach to what we have found consumers want? How effective are their promotion strategies?

For our ‘Promotion to purchase’ study, we have taken the top 20 online retailers in the Netherlands and scored their promotion strategies against a range of criteria based on our research into what consumers are looking for from retailer promotions.

In this report, you will learn how top retailers are delivering promotions, what they’re getting right about their approach, what could be improved, and why. Critically, you will learn how you can apply the results to optimise your own promotions strategy to drive consumers to purchase.

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MethodologyThe top 20 Dutch retailers we scored for this report were taken from the latest Twinkle 10. From the Top 100 online retailers list, ranked on revenue per holding, we took the first twenty websites listed. Giving us a good mix of both big and small retailers. Holdings headquartered outside of the Netherlands were excluded.

During a period of four weeks over February and March 2015, we scored each retailer across criteria that included both the types of promotions they were undertaking and the channels used to reach customers.

The promotion types and channels we chose to score were based on the findings of our consumer research, revealed in the ‘Brands we love’ report, with a view to aligning retailer’s promotions strategy with what our research has found about what consumers are looking for.

Scoring was conducted as scientifically as possible, with anything that could be scored in a ‘binary’ fashion, scored as such. For example, either we found a retailer using vouchers in its promotions strategy, or we didn’t, scoring either a 10 or a zero.

We also only scored for the types of promotion listed here, specifically ignoring more generic sales or percentage discounts. What we were looking for were promotions that provide an immediate incentive to customers to engage and / or make a purchase. We were also looking to study types of promotions and their purpose, with generic discounts or sales being so broad they would be hard to analyse in this manner.

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Types of promotionWhat kinds of promotion does the retailer publish? (10 points each)• Vouchers or coupons• Instant prize draws• Surveys• Competitions• Games / interactive

Channels and usage: Email (10)• Regularity (5)• Variety (5)• Personalisation (5)• Compelling (5)• Mobile optimisation (5)

Channels and usage: Website (10)• On home page (5)• Integrated as part of buying process (5)• Regularity (5)• Variety (5)• Personalisation (5)• Compelling (5)• Mobile optimisation (5)

Channels and usage: Social media (10)• Regularity (5)• Variety (5)• Compelling (5)• Other content (e.g. entertaining / interesting, not just offers) (5)• Encourage sharing (5)

50 35

45 35

The findingsWe have noted in our methodology that our scoring was conducted as scientifically as possible, however it must first be acknowledged that naturally there is an element of subjectivity to the nature of scoring promotions in this way. So for this reason our findings have to come with a small caveat.

That said we were able to use them to draw out some interesting analysis, as much as it must be considered with this pinch of salt. So without further ado…

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Retailer league table

Retailer Category Types of promotion

Email Web-site

Social media

Total Percentage

Blokker.nl Department store 30 30 40 30 130 79%

Bol.com Department store 20 35 40 35 130 79%

AH.nl Supermarket 20 35 40 30 125 76%

Coolblue.nl Consumer 20 25 45 35 125 76%

Fonq.nl Department store 20 25 35 35 120 73%

Gall.nl Liquor store 20 25 40 30 115 70%

Etos.nl Drugstore 20 25 35 35 115 70%

Wehkmap.nl Department store 20 20 40 30 110 67%

Icentre.nl Consumer 20 25 25 35 105 64%

Plasmadiscounter.com Consumer 20 20 40 20 100 61%

Stofzuigerdiscounter.nl Consumer 20 20 30 25 95 58%

Koffiediscounter.nl Consumer 10 20 40 20 90 55%

Mycom.nl Consumer 10 30 35 15 90 55%

Wasmachine.nl Consumer 10 20 40 15 85 52%

Dixons.nl Consumer 10 20 30 20 80 48%

Barbequeshop.nl Special interest 10 0 35 15 60 36%

Keukenmachinediscounter.nl Consumer 10 0 30 15 55 33%

Kpn.nl Telecom 0 0 10 15 25 15%

Magnetron.nl Consumer 0 0 0 15 15 9%

Sneeuwkettingen.com Special interest 0 0 0 15 15 9%

A mix of retailer categories performed very well, with department store, supermarket and consumer electronics all represented in the overall top five

The category department store did exceptionally well

Blokker.nl and Bol.com share the number one spot in best performing retailers for deploying an effective promotions strategy. Followed closely by AH.nl and Coolblue.nl

Specialised retailer Sneeuwkettingen.com and consumer electronics retailer Magnetron.nl were the poorest promotion performers, focussing only on social (it must be acknowledged that there may be brand or other strategic reasons to not participate in promotions in the month of research)

Etos.nl was the only retailer out of the 20 without a web shop, but they did have a lot of online promotions to lure people to physical stores

The most common promotion type was vouchers or coupons, with 17 out of 20 using this mechanism to engage customers, it was followed by competitions, which were used by 10 out of 20

Out of 20 retailers 15 of them shared promotions in email, the lowest of the three channels despite the fact that this is the most popular channel with consumers

20 of the 20 shared promotions on their social media channels however, only a third of our consumers claimed to follow retailers on social channels for their promotions and offers

It was very positive to see that 18 out of 20 were using promotions on their website, providing visitors with an immediate incentive to purchase

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Vertical performance

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An interesting way to look at our benchmark scoring is by vertical or category. In the case of supermarkets, drug store, liquor store, telecom and a few special interest stores we had too few retailers to reasonably draw any conclusions, but we were able to make some broader observations about the following categories.

Consumer electronicsOur consumer electronics retailers are the biggest group in this report. But out of the ten only one of them, Coolblue.nl, made it into our overall top five. Looking at email promotions, these retailers were amongst the poorest. Two out of ten didn’t do any promotions by email at all. Looking at promotions through the website we see that this group focusses heavily on this channel. Only one of them didn’t use this category for promotions. All of the retailers use social media for promotions, but looking at the overall scores it is the second channel.

Department storesFour out of our top 20 online retailers belong to this category. Three of them, Blokker.nl, Bol.com and Fonq.nl, made it into the overall top five. In regards to promotion by email Bol.com and Fonq.nl are in this channel top five. And three, Bol.com, Wehkamp.nl and Blokker.nl, are in the channel top five in regards to website promotions. In social media promotions this category is strong as well. Bol.com and Fonq.nl belong to the top five of this category.

Promotion typesGiven the possible differences between consumer preferences and their actions, what are brands doing with regard to the types of promotion they are using? And how effective are their approaches?

Vouchers or couponsVouchers and coupons are incredibly effective as a sales driver because the consumer benefits from the promotion immediately, providing a direct incentive to buy.

What retailers offer: Over three quarters of our top retailers are providing vouchers or coupons for their customers.

Bol.com and Blokker.nl stood out in the way they provide vouchers and coupons to their customers. They were the only two that gave the customers both ‘week deals’ and ‘day deals’. They communicated these solely on the landing page of their website. Once shoppers land on these pages they are never

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What consumers want: We know from our research that these types of promotions are right at the top of the ‘want’ list for online shoppers. Just under three quarters of our consumers said they want to see vouchers or coupons from retailers.

85%

Of the Netherlands’ top 20 online retailers provide vouchers or coupons for their customers

more than a click away from seeing the deals relevant to what they’re looking for, which is a great way to provide the “casual” browsing shopper with a powerful reason to buy.

A good example of a retailer employing voucher codes effectively was Blokker.nl. Together with its popular brand, the company uses voucher codes to offer its shoppers a discount on a theatre show compelling to their shopping audience. Blokker.nl promoted this through its website.

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Competitions and instant prize drawsCompetitions and instant prize draws are more of a ‘soft sell’ than vouchers, providing an incentive for your audience to engage without a significant investment of their time or money. For this reason they are more of a marketing than sales led promotion, likely to drive awareness and opt-ins rather than direct sales.

What retailers offer: However, despite instant prize draws being more popular, brands tend to focus much more on competitions. Ten out of the 20 brands we scored deploy competitions to engage consumers, none of them did instant prize draws in the time conducting this research.

Retailers’ use of competitions was almost exclusively on social channels. We saw many examples of how a relatively low value prize can elicit a huge response on social channels. This example from AH.nl got customers to enter a picture of their ‘moestuintje’ (a miniature garden shared at the stores after purchasing groceries) and the winner would win a gardener set.

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What consumers want: The ‘Brands we love’ report highlights that consumers prefer instant prize draws to competitions. Around a quarter of consumers enjoy knowing whether they’ve won straight away compared with just under a fifth who are quite happy to enter competitions and wait to hear if they have won.

Most retailers use their own products for competitions, clearly taking advantage of having a wide variety of stock available to generate engagement with potential customers. Etos.nl stood out in this category as it does not have a physical web shop for customers to buy through online. On its website they offered a lot of discounts. On social media, both Twitter and Facebook, the retailer engages with customers through competitions. ‘Retweet and Win’ promotions for instance, and the same on Facebook with share and win.

Fonq.nl also stood out in the way it used competitions on both Facebook and Twitter. With competitions such as ‘Guess & Win the total amount of this price package’. Given that consumers like instant gratification, it seems there’s a great opportunity for retailers to differentiate themselves and generate greater consumer engagement by using instant prize draws as during this research, none of the Top 20 retailers did. For now they seem to be focusing on more tactical ad hoc competitions, mainly for the purpose of social media engagement.

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10Of the Netherlands’ top 20 online retailers use competitions in their promotions strategy

Games and interactive promotionsGames and interactive promotions can be an innovative way to engage with your customers. Creating something new and inventive for potential customers to interact with, which isn’t simply a code or a survey but can provide an incentive to purchase, represents an excellent way to stand out to shoppers and increase the time they spend on your site, as well as make them more likely to buy. An interactive promotion can serve both a marketing and a sales purpose, generating awareness and opt-ins as well as sales.

What retailers offer: In our scoring, we only saw two retailers using games or interactivity in its promotions, Blokker.nl and Coolblue.nl. The one Coolblue.nl offered was extra ordinary as this was promoted on all of its channels except email. Email is used by the retailer solely for product promotion and explanation (videos).

In its photo challenge ‘Pakket pret’ it asked people to do something extraordinary with the boxes they ship products in and each month the retailer asks its Facebook followers to help choose the winner out of its selection of four photos. The winner gets a €100 Coolblue.nl gift card.

But that’s not all the retailer does. It also engages further with its followers by creating their version of one of the photos also sharing these on social media.

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What consumers want: This lesser seen promotion types was not a huge favourable among the consumers researched. Under one in ten said they like interactive promotions and even fewer said they had used one in the last six months, although perhaps these figures can be accounted for the lack of retailers offering these kinds of promotion in the first place.

Channels to purchaseWhen it comes to how consumers want to hear about promotions, the more traditional channels still rule, with email and on retailers’ websites being the top two choices.

So how are retailers matching consumer desire when it comes to using the right channels for their promotions?

EmailAs far as digital communications go, it doesn’t get much more old school than email. But the channel still packs a punch for direct marketing.

So one might expect all retailers to be including their promotions in email marketing and luckily to see, is that they did. Only five out of the 20 retailers didn’t send any promotions through email.

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What consumers want: Email is consumers’ top choice for hearing about retailer promotions across the board, regardless of demographic. Even the ‘millennial’ 18 – 24 year old generation that consists of heavy social media users would rather hear about retailer promotions this way.

75%of retailers are sharing promotions in email

WebsiteTraditionally, retailers may think of their promotions strategy as a vehicle to generate marketing database opt-ins, or to convert that opted in audience via email. That’s why in our experience many retailers can focus at the top and higher end of the sales funnel to draw potential customers in with an incentive to buy.

What retailers offer: Our benchmarking found that 18 out of 20 had featured promotions on their websites, all of them were featuring these on the home page.

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What consumers want: However, our consumer research shows that over a third of online shoppers want to find out about promotions when they visit a retailer website. An engaging promotion can be an extremely effective way to convert those casual browsers into customers. Smart promotions are an on-site sales tool, not just a way of converting your audience further up the funnel.

90%of retailers are sharing promotions on their website

Social mediaConsumers go to social media to see updates from their friends, news and other interesting updates. So do retailer promotions have a place within that kind of content?

What retailers offer: Coolblue.nl was a good example of achieving this balance, as we’ve outlined earlier, but other retailers had similarly effective strategies

As we mentioned in the ‘competitions and instant prize draws’ section of this report, the majority of retailers employing this kind of promotion are doing so on their social media channels. And this kind of promotion tends to be the only type they are employing on social media channels. Coolblue.nl was the only one using social media for interactive promotions and gaming on a regular basis.

While the competitions and interactive promotions do receive good levels of engagement, it does seem that there is a missed opportunity for retailers. Consumers want to see promotions in their social newsfeeds. At the moment they are most likely to see other content and competitions, yet surveys and voucher codes are all a good fit for this kind of marketing environment and precious few retailers are capitalising on this.

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What consumers want: A third of consumers told us that they follow retailers on social channels for their promotions and offers, however nearly as many claim to follow for interesting, funny or entertaining content. This suggests that if retailers are to use social channels, their approach should be balanced between promotion led and more fun or interesting content.

100%of retailers are sharing

promotions on social media

5. Six lessons from 20 online retailer’s promotionsYou don’t examine the top 20 retailers’ promotions in the UK without picking up a few things. Here’s what we learnt from scoring their promotions strategies.

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1The voucher code is powerfulThe voucher code – or coupon – is the most popular kind of promotion as far as consumers are concerned, and the majority of our top retailers appear to be alert to this. A voucher code offers an immediate incentive to purchase and doesn’t limit a potential customer in their buying choice.

2Don’t keep promotions hidden awayAlthough the majority of retailers were using voucher codes, many neglected to put them anywhere easily accessible. There is a culture of shoppers who will go and search for a brand’s voucher codes elsewhere on the web, but there are also many shoppers arriving on your site who will be a magnitude more likely to make a purchase if they see a compelling promotion.

3Be adventurous, try something interactiveWe know from our customer’s experiences that interactive games and promotions are a hugely powerful way to drive engagement and sales. A voucher code is one thing, a voucher code you’ve won via a fun interactive on a retailer website means even more incentive to use it.

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4

5

Don’t hold back on emailYou may have heard that our inboxes are precious, and consumers no longer want to be spammed with every retailer offer going. Our research shows that for the vast majority of people that is not the case. They want promotions in their inbox, and they want them now. That isn’t to say you shouldn’t try to target and personalise, but our benchmarking suggests a new retailer reticence about emailing promotions where there needn’t be.

6

Convert on site with promotionsWe’ve mentioned that there should be nothing stopping you from putting your promotions strategically on your website, and this involves a slightly new way of thinking. Rather than seeing promotions as a means to convert your audience at the top of the sales funnel, think of all that traffic you are getting to your site via search and advertising, and how you can convert it better. Would those visitors not be more likely to make a purchase if the first thing they see when arriving on your site is a voucher code or new and unique interactive promotion? If they arrive on a particular product landing page, then is that higher likelihood of them knowing what they are looking to purchase going to be more powerful if they see a relevant promotion too?

Ask for feedbackA disappointingly low number of retailers in our scoring were making use of surveys, despite the fact that this type of promotion is actually the most regularly engaged with according to our consumer research. Your customers are eager to offer you their valuable feedback, so give them that opportunity. That said, asking for feedback about a customer experience is not the only reason you might use a survey. They can be powerful tools for looking into which products you should be offering, or simply as a conversational way of generating engagement with your customers.

ConclusionWe understand that there are logistical challenges in deploying an effective promotions strategy, and saw evidence of this in scoring the top 20 retailers. The lack of cross channel promotions suggests that within many retailers there are different teams managing different channels, often with slightly different objectives.

If one thing is clear from both our consumer research and retailer scoring, it is that promotions have a place right across the customer’s purchase journey, from discovery and browsing, right through to the moment they buy. And what we’ve seen from this report is that a savvy approach can lead to very real business benefits, driving sales and revenue as well as marketing objectives.

Taking our benchmark scores, and cross referencing them against the revenue generated by the holdings they belong to, we found a trend for a better score equating to more revenue per holding. For instance Blokker belongs to the fifth biggest Dutch holding we found in the Twinkle Retail Top 100. Bol.com belongs to the first biggest Dutch holding in this list. But both were the best scoring retailers, which suggest that successful businesses big and small employ smart promotions strategies.

If you can overcome the hurdles to deploy a smart promotions strategy, the power to drive sales is undeniable.

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About RapidCampaignRapidCampaign enables retailers to create engaging online promotions that improve conversion rates by activating customers at critical points in the purchase path.

The intuitive tool allows retailers to quickly design and implement a range of promotions to engage and reward customers, including viral coupons, a wheel of fortune, image voting, prize draws and competitions.

Retailers have complete control over the promotions they create and, because all mechanics are built in, can easily publish their promotions within their own online store, as a specific promotion site or via an app on Facebook.

Owned and developed by NearMe Services in Finland, RapidCampaign works with online retailers from a range of sectors, including travel and leisure, fashion, automotive, health and beauty and entertainment.

www.rapidcampaign.comFor more information, visit:

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