Hey, there and welcome to this weeks pricing insights! Despite the grey November without any snow here in Finland Christmas is approaching fast and shops are starting to fill with Christmas items. This week, we’re focusing on how should you take into account Singles Day, Cyber Week, and Black Week in your pricing strategy — and what you can do to protect your bottom line as we head toward Christmas.
The impact of discounts on customer behavior
There is massive discounting during these big sales events. While they do attract customers, they also change customer perceptions about price. Heavy discounting can make it challenging to sell products at full price afterward, especially when Christmas is around the corner. How do you maintain your profit margins while still participating in these sales?
Singles' Day, celebrated on November 11th (11/11), started in China as an anti-Valentine's Day for singles, but it has grown into an incredible shopping event! Back in the 1990s, students came up with the idea to celebrate being single, and the date—filled with ones—represents "singleness." Over the years, it transformed into a massive online shopping festival, largely thanks to e-commerce giant Alibaba, which offers amazing discounts, flash sales, and promotions that even outshine Black Friday and Cyber Monday. Now, Singles' Day is a global phenomenon, and it's exciting to see so many retailers around the world getting involved!
Discounts for the whole week and sometimes even longer
Black Week is the extended Black Friday, the day after Thanksgiving in the U.S. It’s when the holiday shopping season really kicks off! Instead of limiting deals to just Black Friday, many stores now extend their discounts for the whole week and sometimes even longer. I have also seen advertisements that refer to Black Month. This period includes Cyber Monday, which is all about online deals, and it’s packed with everything from big discounts to flash sales and unique promotions. Over the years, Black Week has become a global phenomenon, transforming into a major shopping event that really tries to get people in the shopping spirit and encourages early gift shopping for Christmas.
Sales strategies to maximize your christmas profits
If Christmas is your peak selling season, it's crucial to implement strategies that maintain profitability. Here is a list of tips how to keep prices on the normal level:
- Set clear discount limits: Determine the maximum discount you can offer without affecting your profitability too heavily. It may good idea also to offer discounts based on conditions, like a minimum spend threshold, buy-one-get-one promotions, or use discount tiers.
- Focus on bundling: Create value by combining complementary products or services into attractive bundles instead of reducing individual prices.
- Offer exclusive products: Introduce limited-edition or exclusive items that can only be purchased during the sales event to drive interest without the need for heavy discounts.
- Add value with extras: Enhance customer appeal by including free add-ons, services, or extended warranties rather than reducing the product price.
Avoid heavy discounting during major sales events
Heavy discounting can really hurt how customers perceive the value of your brand. It sets an expectation for consistently low prices, which can harm your pricing over time. Not only does it have a negative impact your profit margins, it can also makes it difficult to raise prices later without losing loyal customers. If you get too focused on short-term sales, the long-term growth can be challenging, and you can easily find yourself stuck in a cycle of relying on discounts. This approach of discounting ultimately damages profitability and increases how sensitive customers are to prices.
Ensure sales events don’t impact your profitability and pricing too much! What strategies will you employ this holiday season? We hope these insights help you balance discounts and profits effectively.
P.S. If you found this newsletter helpful, share it with others who might benefit!
