In today’s saturated e-commerce landscape, running a general sale is no longer the most effective way to drive revenue and build brand loyalty. While site-wide discounts may seem like an easy way to boost sales, they come with significant downsides, from decreased brand value to inventory control issues. Instead, offering personalized discount codes and targeted coupon incentives leads to a more strategic and profitable approach. Here’s why:
#1. Standing Out in a Crowded Inbox
During seasonal sale periods, consumers are overwhelmed with promotional emails. Take Valentine’s Day or Presidents’ Day as examples—on these days, inboxes are flooded with generic “20% Off” subject lines from various retailers, all vying for attention. With limited spending power, customers must choose where to shop, and a general discount often gets lost in the noise. A personalized offer tailored to a customer’s past purchases or browsing history is far more likely to grab their attention and drive engagement.
Example:
A customer who frequently buys athletic wear from a brand will respond better to an email offering “Exclusive 20% Off Your Favorite Running Gear” rather than a blanket “20% Off Everything” promotion.
#2. General Sales Devalue the Brand
Frequent and broad discounting can make a brand seem like a discount retailer rather than a premium one. When customers know that sales happen regularly, they’re more likely to delay purchases and wait for the next markdown, reducing the urgency to buy at full price. This is a common problem for brands like GAP, where customers rarely feel the need to pay full price since sales happen so frequently.
Example:
H&M Home often features the same discounted products for weeks, signaling to consumers that these items are either overstocked or unwanted, which lowers their perceived value.
#3. Resellers Exploit General Sales
General discounts, especially on high-demand products, can lead to bulk purchases from third-party resellers rather than genuine customers. These opportunistic buyers scoop up discounted products only to resell them at a markup on platforms like Poshmark or eBay, reducing inventory for actual brand loyalists and eroding direct customer relationships.
Example:
Reformation, a popular fashion brand, frequently experiences this issue. During sales, sought-after items are purchased in bulk by resellers and later appear on second-hand sites at inflated prices, frustrating loyal customers who miss out.
#4. Personalized Discounts Drive Customer Loyalty and Retention
Rather than offering the same discount to everyone, personalized promotions leverage customer data to create offers that feel exclusive and relevant. This fosters stronger brand loyalty, increases repeat purchases, and enhances the overall shopping experience.
Example:
A beauty retailer like Sephora could analyze a customer’s purchase history and offer a personalized “15% Off Your Favorite Skincare Brand” instead of a blanket discount. This makes the offer more enticing and relevant, increasing the likelihood of conversion.
#5. Better Margin Control & Profitability
When running a general sale, businesses often sacrifice their margins without strategically targeting the right audience. Personalized discounts allow brands to control who gets what offer based on purchase behavior, maximizing profitability while rewarding loyal customers.
Additionally, personalized discounts enable brands to optimize their promotional spending by segmenting their customer base. Instead of offering flat percentage discounts to all shoppers, companies can provide non-financial incentives—such as exclusive access, early product releases, or freebies—to their high-value customers, for whom monetary discounts may not be a strong motivator. These non-financial perks enhance brand perception while maintaining margins.
Example:
A luxury beauty brand might offer VIP customers exclusive early access to a new product launch instead of a discount, reinforcing their status and encouraging loyalty. Meanwhile, budget-conscious customers might receive targeted discounts on frequently purchased items, ensuring that promotions remain relevant and effective.
Benefits of Personalized Discounts Over General Sales:
Higher Conversion Rates
Studies show that personalized discounts lead to significantly higher conversion rates than general sales. When customers receive an offer tailored to their interests, they are more likely to act on it. For instance, a study by Accenture found that 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers.
Brands like Nike and Adidas leverage customer purchase history to send tailored discounts on frequently bought items, leading to increased conversions and customer retention.
Enhanced Customer Loyalty
Personalized experiences create a sense of exclusivity and appreciation, which strengthens customer loyalty. When brands demonstrate that they understand their customers’ preferences, consumers are more likely to return and engage.
Starbucks' personalized rewards system offers custom discounts based on previous purchases, fostering long-term customer relationships and driving repeat sales.
Increased Average Order Value
Targeted discounts can also lead to higher spending per transaction. Offering a discount on a complementary product or bundling items encourages customers to add more to their cart.
Amazon frequently utilizes upselling strategies by offering “Buy One, Get 20% Off Your Next Purchase” promotions, which increase basket size and total spending.
Targeted Marketing Efficiency
Personalized discounts help refine marketing efforts, ensuring that the right audience receives the right offer at the right time. This minimizes wasted promotional spending and improves overall campaign performance.
Fashion retailers like ASOS use AI-driven customer insights to tailor discounts, resulting in a more effective and data-driven approach to promotions.
Final Thoughts
While general sales may seem like an easy way to boost short-term revenue, they come with long-term risks: decreased brand value, inventory mismanagement, and lost customer engagement. By shifting towards personalized discount codes and strategic coupon incentives, brands can create stronger connections with customers, enhance profitability, and stand out in an oversaturated market. Personalization is no longer just an option—it’s a necessity for modern retail success.
About the Author:
Ewelina is a Marketing Technology Entrepreneur with over 10 years of experience leveraging data to personalize customer journeys across multi-channel experiences. She has a passion for shaping consumer behavior through contextual, predictive, and personalized promotions and incentives that deliver value to both brands and customers.
Connect with Ewelina on LinkedIn.
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