According to new research from the UK’s top discount brand, the majority of start-up retailers and service providers within Britain begin providing discounts after two years of trading, with as many as 63% wishing they’d done so sooner.
The team at www.vouchercloud.com analysed on-site data in order to determine that an average retailer offering discounts on their products can generate an additional three-figure increase in sales per month through providing discounts and voucher codes, with the average basket size totalling £80.
Following on from this, 875 retail and service provider business owners from around the UK, all of whom stated that their company had been running for at least two years and that they were offering discounts to customers, were quizzed about how discounting had impacted their business.
Initially, all respondents were asked ‘How long after launching your business did you begin to provide voucher codes/discounts for/on your products?’ to which the majority of respondents, 51%, said it had been ‘after two years’ of trading. However, 63% of these respondents said they wished they’d offered discounts earlier on.
All respondents were then asked ‘What was your motivation for providing voucher codes and discounts?’ When shown a list of possible responses and told to select all that applied, the top five answers were as follows:
- Wanted to attract new customers – 74%
- Had to meet sales targets on a particular product / service – 61%
- Wanted to reward current customers – 58%
- Wanted to increase brand awareness – 50%
- To coincide with/boost new product launch – 32%
All respondents were then asked ‘Do you find that some discounts drive more sales than others?’ Four fifths of respondents, 81%, said ‘yes’; wit respondents noting that the most popular deals were a ‘20%+ discount’ (26%) or ‘freebie vouchers/offers’ (23%).
Chris Johnson, head of operations at vouchercloud.com, commented: “Whatever a company’s reasons for offering discounts and voucher codes, it’s difficult to argue that it doesn’t work. Changes in consumer behaviour has dictated desire for discounting over recent years, and with the added incentive of a 25% uplift in sales for brands when utilising a discount-led channel, it should be a consideration for brands who have historically been resistant to lowering margins.”