What’s hot and when it’s not

Simon Bird, UK director of retail partnerships at voucher code site Savoo.co.uk, offers insight into how codes and deals can offer retailers the opportunity to maintain profit margins and remain one step ahead of the market.

Clothing, shoes and accessories – this category has the most number of deals available. Saving percentages were around 50% until the autumn of 2009 before dropping to around 30% and then remaining between 30% and 40%. The challenge that retailers face with this category, is dealing with selling stock within the two main seasons. Failure to sell stock in a timely fashion will result in significant profit loss. The retail market for clothing, shoes and accessories is one of the fastest-growing categories online, therefore voucher codes offer an opportunity to sell end of season items without large-scale sales. Using vouchers, retailers can offer incremental savings to retain margins, before resorting to heavy discounts.

Kids, babies and teens – despite the fact that the growth in discount percentages offered has been slow, this category has grown the most in its voucher code offering, leveling off at around 30% – very similar to the clothing, shoes and accessories category, which makes sense due to the product category overlap. Many retailers operating in this market are able to access top-of-the-line customer information, such as birth registration numbers from Bounty (if registered) and the NHS. To succeed in this category, retailers need to consider two major factors: 1) the need to regulate offers relating to age ranges and 2) acknowledge that the rise of social media has created a collective shopping culture which includes safety conscious mothers who spend more time researching products online, using peer-to-peer reviews and referring to star ratings or number of ’likes’ on vouchers as part of their purchase decision-making process.

A highly competitive and saturated consumer category

Travel – the data results highlight this category as the most sensitive, with savings percentages peaking during the summer and then returning to around 15% during the winter. The challenge with the travel market is that it is very seasonal and one of the first industries to be significantly impacted by economic pressures such as the recession, airline strikes and the ongoing ash cloud. Vouchers should be seen as an ideal vehicle for promotions where retailers can lower prices without having to decrease their rates. This allows retailers to maintain their positioning and continue to sell at a higher margin. It also enables them to continue to gain new customers or extend loyalty through the use of vouchers. The vouchers can be used to cover periods of low demand, for example a leisure hotel voucher code that offers an extra night free on Sunday – typically a night of low demand. Vouchers also provide an opportunity to promote lower occupancy rates rather than using traditional advertising channels.

Online retail has developed beyond having a website presence. In the tightened economy retailers need to constantly look for ways to offer their increasing-online audience, added value without dropping their rates. The above consumer category snapshots highlight how vouchers can be used to remain one step ahead of competitors. This involves pinpointing the challenges of each category and using voucher codes to directly address the challenges.

To summarise each category, within the clothing, shoes and accessories sectors, voucher codes should be used to retain margin on seasonal stock, when done correctly this can draw attention to the new season’s offer. In the category kids, babies and teens, retailers need to employ a highly tailored approach to their audience, taking advantage of available market data to personalise and regulate their offers to age range as much as possible. Retailers in electronic goods need to constantly work with manufactures to offer high value, short term vouchers that rise above the constant stream of ongoing vouchers. Whereas travel, leisure and entertainment need to focus on coordinating the timing of their vouchers to address seasonal and day to day demand and avoid rate dropping.

With the rise of social media, retailers in all categories need to incorporate this into their voucher strategy and work towards the ’viral voucher’. Consumers are becoming more savvy as they spend more time online researching products, looking for deals and using user generated content to aid decision making.

Simon Bird is the UK Director of Retail Partnerships at Savoo.co.uk, one of the fastest-growing voucher code sites, which features offers such as Dell discount codes and Apple promo codes. With Over 16 years of international and strategic commercial development with B2B and B2C markets, Simon’s experience includes brand management at Affiliate Window, one of the largest Affiliate Networks in the UK, where he secured over 300 brand partnerships, driving gross profits in excess of £1.5m (in their first year on the network) and securing high profile wins including Sky, BA, Boden & New Look.


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