Creating Winning Cart Discounts in 2023: A Step-by-Step Guide

Have you ever walked into a store with a fistful of coupons, ready to save some serious cash, only to find out that none of them apply to the items in your cart? It's like a cruel joke, right? Thankfully, long gone are the days of newspaper-cut coupons! For that's where cart-level promotions kick in.

In recent years, cart discounts have become a popular way for brands to offer savings to customers who are ready to make a purchase. But what exactly are cart discounts, and how do they work? In this blog post, I will take you on board to explore the universe of cart-level promotions, including what they are, how they differ from other types of discounts, and how retailers and ecommerce businesses can use them effectively to build customer loyalty.

What are cart discounts and how do they work?

Cart discounts are a type of sales promotion offered by brands to customers. They are designed to encourage customers to make a purchase by offering them a percentage or fixed amount off their total order, usually when they reach a certain minimum spend threshold or purchase a specific combination of products.

Unlike other types of discounts, such as coupon codes, cart discounts are automatically applied at checkout based on the contents of the customer's shopping cart and order context. This makes them a convenient and effective way for brands to incentivize shoppers to complete their purchase, without requiring them to take additional steps or enter special codes.

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What are the key advantages of cart discounts?

Cart discounts have several advantages for retailers, including:

1. ‍Encouraging customers to complete their purchase – cart discounts incentivize customers to complete their purchase by offering them an enticing savings incentive.‍
2. Boosting sales and revenue – by offering discounts at the point of purchase, retailers can increase their conversion rates and encourage customers to spend more.‍
3. Increasing average order value – cart discounts often have a minimum spend threshold, which can encourage customers to add more items to their cart in order to reach the threshold and qualify for the discount. Keep in mind that upselling works best if customers immediately see how much they can save. It’s important to take into account the dynamic price recalculation when designing the discount redemption process. API-first technologies are your best bet here. ‍
4. Building customer loyalty – customers who receive a cart discount are more likely to feel positive about their shopping experience and return for future purchases.‍
5. Convenience for customers – cart discounts are automatically applied at checkout based on the contents of the customer's shopping cart, making them a convenient way for shoppers to save money without having to remember or enter special codes.
6. Easy implementation – brands can easily set up cart discounts using a Promotion Engine, making them a simple and cost-effective way to drive sales and increase customer satisfaction.

Learn more: How to ensure the best UX for coupons and promotions?‍

Potential obstacles while creating cart discounts

While cart discounts offer many benefits, there are also potential traps to watch out for:

1. Over-reliance on cart discounts

If retailers rely too heavily on automatic cart discounts as a marketing tool, they run the risk of making customers consider discounts as a regular part of their shopping experience. This could lead to lower profit margins and reduced perceived value of products and brands in general in the long run.

2. Setting discount levels too high

Offering overly generous discounts can eat into profits and diminish the perceived value of products. Other security concerns can be minimized by splitting the customer base into smaller chunks, trying out new promo campaigns with them and then comparing your results to a control group. It’s a standard A/B testing procedure.

With the right promotion software, you can define halting conditions for any auto-applied discount. For example, you can stop the promotion from being rendered when the total amount of orders exceeds a given number. Or, you can limit the number of discounts for a customer within a single day. This will ensure your promotional budget doesn’t get wasted on campaigns that don’t work or are misused by fraudulent customers.

3. Excluding popular products from discounts

If brands exclude popular products or brands from their cart discount promotions, they may risk frustrating customers and harming their shopping experience.

4. Unclear terms and conditions

If the terms and conditions of cart discounts are not clearly communicated to customers, it can lead to confusion and frustration, potentially, damaging the image of a brand. Ambiguous promotion conditions can also violate the EU’s Omnibus Directive and other customer protection legislation and potentially lead to severe fines.

5. Technical issues

If the e-commerce platform does not effectively apply the cart discounts to customer orders, it can lead to customer dissatisfaction and lost sales. Retailers must ensure that the technology they use is reliable and properly configured to handle cart promotions. Promotion Engine is a recommended software tool to use for advanced product-based cart discounts.

Examples of go-to cart discounts in 2023:

1. Abandoned cart promotions

With more than 60% of carts being abandoned before finishing the purchase, discounts have emerged as the perfect remedy for saving many of them.

Abandoned cart discounts are a popular tactic used by brands to encourage customers to come back and complete their purchases. When a customer adds items to their cart but leaves the website without checking out, the retailer may send them an email/push notification/SMS offering a discount on their purchase. This incentive is designed to entice the customer to return to the website and complete the transaction.

This promotion flow can be achieved both via promo codes and as an automatic discount that is attached to the customer profile when he or she clicks the link in the message.

2. Volume discounts

With this type of cart discount, customers are offered a percentage or a certain amount off their purchase when they spend a specific amount of money. These types of promotions can be effective at increasing the average order value and encouraging customers to buy more products. Volume discounts are also very common in B2B space.

3. BOGO cart discount

Let's talk about BOGO offers. In simple terms, BOGO stands for "Buy One, Get One," and such a siren call is particularly attractive to customers. With a BOGO discount, clients can purchase one item and get another item of equal or lesser value for free or at a discounted price. By combining BOGO discounts and product bundling, you may provide related products that are packaged together at a discounted price or complementary items that are part of the same product line. This way, you might create even more savings opportunities for your customers, as well as use BOGO deals to clear out your inventory.

4. Referral-oriented cart promotion

Cart-level discount combined with a referral campaign work together like a well-oiled machine. In this case, discounts are typically offered to both the referrer and the referred customer, and are usually in the form of a percentage or fixed amount off their next purchase. Referral-oriented cart promotion can be an effective way for retailers to leverage the power of word-of-mouth marketing and increase customer acquisition.

5. Product-specific cart promotion

Cart discount for particular SKUs is a type of promotion that retailers offer to customers, where they provide a discount on a specific product or group of products when added to the cart. This type of discount can be a great tool for retailers, as customers are more likely to return to the store if they know they can get a discount on a product they regularly purchase.

6. Sign-up cart discount

Sign-up cart discount is a popular marketing strategy used by many online retailers to encourage customers to sign up for their newsletter, create an account or subscribe to their service. This discount is usually offered in the form of a percentage off or a fixed amount discount on the customer's first purchase. By offering an incentive to new customers, retailers might  increase their customer base and promote their brand on a bigger scale.

How to create a cart-level promotion with Voucherify in 6 easy steps?

When a customer visits your shop, your application sends an event to Voucherify API. Voucherify identifies the consumer and then tries to match their cart items with predefined discount rules. If a match is found, Voucherify sends back the details of applicable discounts so that you can show the incentive to the consumer and deduct the calculated amount right away. Thanks to this targeting based on customer attributes, different groups can be targeted with various discounts.

Creating cart-level promotions with Voucherify is a straightforward process that can be completed in a few simple steps:

1. Configure general promotion settings such as name, start and expiration dates.

2. Gamify your cart promotion with tiers This means setting up different discount levels or incentives based on cart value thresholds or other criteria (such as customer attributes or unique order properties). For example, you might offer a 10% discount on carts between $50 and $100, and a 20% discount on carts over $100.

3. Define the details of your promotion, including the discount amount, type of discount (e.g., percentage, fixed amount, and much more), and any other relevant restrictions or conditions.

4. Create validation rules, that is rules that check whether the cart meets the conditions for the promotion to apply. For example, you may want to require a minimum cart value or a specific product to be in the cart.

5. Determine promotions hierarchy, meaning the order in which the discounts from various tiers will be applied to a customer’s order. If a customer is eligible for discounts from more than one tier, the discounts will be applied in the hierarchy's specified sequence.

6. Use metadata to build discount conditions based on specific attributes. For instance, you might launch a special Valentine's Day campaign for all of your store's red items or create region-specific validation rules, making your cart promotion valid only for customers from within the US. This way, you can manage more complicated segments with just a few clicks without risking the opening of the chamber of secrets of your development team.

Conclusions

With Voucherify's user-friendly interface and flexible promotional options, you can easily tailor your cart-level promotions to meet the specific needs of your customers and your business. Whether you're offering free shipping, percentage-based discounts, or buy-one-get-one deals, Voucherify makes it simple to create and manage your promotions with ease.

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