Discount codes: Why your mobile e-commerce app needs them

Discount codes: Why your mobile e-commerce app needs them

Almost every e-commerce business offers some type of discount code to their customers. And for a good reason! They are a great way to increase sales, get more people to buy from your store, and fill up their carts! In fact, 29% of customers end up adding more items to the basket when products are steeply discounted.

Many e-commerce store owners are hesitant to offer discount codes, fearing that it will eat into their profits. After all, discount codes mean you'll sell your products for less than full price. However, discount codes can actually be a powerful tool for boosting sales and increasing conversion rates. When used strategically, they can help to drive traffic to your store, increase average order values, and generate repeat customers. As a result, the promo codes can have a significant impact on your bottom line.

So if you're looking for a way to give your mobile e-commerce app a boost, discount codes may be the answer.

What are discount codes?

Discount codes are like a secret language between shoppers and retailers. They offer a way to save money on purchases, and they can be found just about anywhere. In the past, customers needed to get them from newspapers, flyers, and even right from the product packaging. Now, it is even easier to give your customer a special treat: via e-mail, directly on the website, or via push notifications. But what exactly are discount codes?

Discount codes are simply codes that can be entered at checkout to receive a discount on a purchase. They are typically provided by retailers as a way to encourage shoppers to buy more items or to promote new products. Customers usually get a percentage off their basket total; other perks, like free shipping or product samples, are also very enticing.

Why your e-commerce store needs them

Discount codes provide an incentive for people to buy from your e-commerce store. By offering it, you're essentially giving customers yet another reason to choose your mobile app over a competitor's. And the more customers you can bring in, the more sales you'll make. Do not underestimate the power of a good deal: according to Statista, a whopping 89 per cent of millennial shoppers in the United States would try a new brand if they were offered a coupon or discount.

Discount codes can also help increase each sale's average order value. If customers know they can get a few bucks off their purchase by using a promo code, they're likely to add a few extra items to their cart. As a result, a rebate can actually help you to boost your revenue - even if each individual sale is for less than full price.

Another great benefit of offering discount codes is that they are an excellent way to measure the effectiveness of your marketing campaigns. By tracking how many people use a particular code, you can get an idea of how well your marketing efforts are performing. Ultimately, they can be a valuable tool for fine-tuning your marketing strategy.

Offering discount codes and making a good profit

Who doesn't want to make customers happy and increase revenue? Offering discount codes to your customers do just that, besides being a great way to show appreciation and loyalty. However, it can also come at a cost to the business if not done correctly. If you are considering it, there are a few things to keep in mind in order to avoid losing money. 

  • Be selective about when to use them. If you give too many discounts, people will start to expect them, and it may erode your profits. Instead, offer the promotional codes sparingly, making them feel like a special treat. Overusing discount codes can also lead to a lower perceived value of your product.
  • Make sure the discount is reasonable. It must be significant enough to be enticing but not so large that it eats into your profits. A discount of 10-15% is usually a good sweet spot.
  • Set a minimum spend amount. This will help ensure that customers are actually spending money, rather than just using the discount code to score free shipping or a small saving on their purchase.
  • Consider excluding certain items from the discount if your margin is already tight. Do not forget to signpost any exclusions so your customer won't get frustrated.
  • Limit the discount code to one per customer. That way, shoppers will feel compelled to make the most of it in one single purchase by buying more items. Not only does this increase revenue, but it also helps with the cost of packing, shipping and delivering.

Discount codes can be a great way to boost your mobile e-commerce app, but it's essential to use them intelligently in order to protect your profits. By following these tips, you can offer discount codes without negatively impacting the business.

Tips for creating effective discount codes and converting more sales

When it comes to using discount codes, there are a few things you'll need to keep in mind. First and foremost, you'll need to make sure that your discount codes are easy to find. If customers can't locate them, they won't be able to take advantage of the discount. You should therefore promote your codes prominently on your mobile app and in your marketing materials.

1. Make sure the discount code is easy to remember and enter. Releasing a new women’ swimwear collection? Code MERMAID would definitely work better than SBUKX10X-26V-X2Q-3NX-DLS (this is a real active promo code!!!).  These long, complicated codes will only frustrate customers and increase the likelihood of them dropping out. We definitely don't want any abandoned carts anymore!

2. Be strategic about when you release the discount code. For example, if you're trying to increase holiday sales, releasing the code in late November is likely to be more effective than releasing it on Christmas Eve.

3. Create a box labelled "discount code" or "promo code" to be used during checkout. That's where your customer will input the code, and it should be super clear so that they go ahead with the purchase.

4. Set an expiration date for the discount code so that customers feel the urgency to use it before it expires. Let the FOMO kick in.

5. Finally, ensure that the discount code is well-publicised on your website, mobile app, and any marketing campaigns you're running. Keep in mind that discounts obtained via a smartphone or another mobile device influence where 67 per cent of customers do their shopping. Push notifications, anyone? 

Conclusion

Discount codes are a great way to incentivise customers to shop at your mobile app. By offering them, you can encourage customers to try new products or thank them for their loyalty. When used correctly, discount codes can be a powerful marketing tool. 

Obviously, there isn’t a magic formula for how to use promotional codes. The main key is to understand your customers and provide them with what they’re looking for. Take Zalando as an example. With a yearly revenue of €10.25 billion, the online retailer giant does A/B coupon testing, measuring and understanding what works locally and among a certain demographic, like age or gender. 

But some parameters are considered best practice, as we’ve laid out above. Zalando bets on limited-time discount codes, for example, and limits the usage to one redemption per customer. 

So what are you waiting for? Start offering discount codes on your mobile app store today!