B2B partnership: UCI embarks on a collaboration with marketing specialist Opia

UCI, one of the leading cinema operators in Germany, has started to collaborate with global marketing services provider Opia. This new partner will bolster UCI’s direct sales of electronic cinema vouchers to corporate customers.

Bochum: UCI’s parent company, ODEON Cinemas Group, has been partnering in the United Kingdom and Ireland with marketing services specialist Opia for over five years. This partnership will now be expanded to Germany.

As part of the collaboration, UCI is looking forward to Opia’s support with sales of electronic vouchers to corporate clients.

The UCI sales team will naturally continue to be available for sales of the familiar cinema vouchers and will furthermore advise corporate clients on B2B events and advertising opportunities.

Ramón Biarnés, Managing Director Southern Europe, which also includes UCI Germany, said,
“We’re delighted by the closer partnership with Opia and anticipate new impetus in the B2B business in Germany. Opia has already made an impression with its strategic ideas in the United Kingdom and Ireland. We will achieve our goals in the B2B sector together with the German sales team and Opia.”

First and foremost, Opia will specialise in winning new customers in the field of electronic vouchers. The company has a long history of successful provision of sales promotion services to leading brands and has experience in both business-to-business and business-to-consumer promotions.

Andy Stone, Head of Reward Sales with Opia, explains, “Everyone knows that cinema is a great attraction. A superb film can scare us, make us laugh or cry - or simply make us feel good. This is why incorporating the power of the cinema into your business-to-business or employee incentive programme is so effective. Everyone loves a good film!”

UCI cinema vouchers for corporate clients are used by businesses for a range of activities: to thank customers and as customer loyalty scheme rewards, as incentives and employee gifts. Corporate clients can find all the details of our B2B products and contact our sales team at uci-media.de.

Corporate clients can contact Opia directly on [email protected] for electronic voucher enquiries.


About UCI

In its 30-year-plus history, UCI’s numerous innovations have made it synonymous with pioneering spirit in the cinema industry. UCI operates 22 cinemas in Germany, with five IMAX cinemas and the first ScreenX cinema in Berlin’s flagship cinema, UCI Luxe Mercedes Platz. UCI is a member of the ODEON Cinemas Group, Europe’s biggest cinema operator, with 290 cinemas, 2,558 screens and more than 11,000 employees in nine cinema markets. The ODEON Cinemas Group is part of AMC Theatres®, the world’s biggest cinema chain, which operates more than 1,000 cinemas, with over 11,000 screens, in 15 countries.


How promotions are helping online furniture sales take a bigger market share

Sourcing and purchasing good quality furniture represents a considerable investment; the size of that investment is an important consideration, both in terms of time and expense. So, what can furniture category managers do to ensure their products and online furniture sales factor into customers’ decision-making?

Traditional discounting remains a popular selling tool for furniture retailers. Yet many potential customers now view these discounting methods with disinterest and even suspicion, making it clear that a different approach is needed.

With many purchases now taking place online, what methods can retailers use to engage their audience and gain a bigger market share?

At Opia, our recent Retail Confidence Report takes a closer look at the current market sentiment, seeking to shed light on overcoming purchase barriers, driving sales and delivering the best customer lifetime value.

Here we review some of our results to find answers to these questions that furniture category managers are currently contemplating.

A modern phenomenon, driven by modern times

The COVID-19 pandemic saw consumers take a greater interest in their home surroundings, driving a rise in furniture sales across every conceivable channel. The world has changed; understanding exactly how it has changed for consumers will be a key factor for furniture retailers.

Traditional discounting is clearly no longer having the desired effect. A surprising 84% of people Opia asked perceived furniture retailers as always having a sale on. Furthermore, only 9% believed they were getting a good deal. These statistics highlight that retailers must find new and innovative ways to gain trust and a share of this increasingly competitive market by using different kinds of promotions.

In-store purchasing still has a role to play; colours, textures and comfort are all things that cannot be ascertained via a screen as they can in person. However, online furniture sales are rising; 56% of our survey participants reported buying furniture online last year. This figure rose to 69% in the 25-34 age category, illustrating that tech-savvy younger people, looking for the sheer convenience of buying online, are driving that rise.

The trust problem

As with all things, relentless undifferentiated promotion loses its efficacy if we see it often enough. Only 9% of consumers asked had complete trust in the discounted prices they were offered. There is likely to be a range of complex factors involved here. For example, our research showed that younger people are more inclined to trust those retailers and be swayed by their promotions. However, that figure falls as we look at older consumers.

The decline in the power of pricing

Pricing is a crucial factor in the decision-making process when reviewing online furniture sales. Nonetheless, pricing alone might be counter-productive in a world where discounts are not as effective as they once may have been.

Conveying quality online

Quality has never been more critical, yet it is a factor not so easily conveyed online.

How can furniture retailers reassure their potential consumers of their products' quality when only conveying digital information during online furniture sales? Our industry experience and our recent research point to several effective ways to remove this significant purchase barrier:

Buy and Try is one valuable way to demonstrate quality and foster trust in your products. This tactic reduces hesitation and boosts buyer confidence in the guarantee of satisfaction.

Referrals and rewards work as an excellent promotional tool, thanks to the power of peer recommendation. An overwhelming 92% of people trust referrals from those they know. They are also four times more likely to buy a product recommended by a friend.

Moreover, referred customers are more likely to recommend a brand to even more potential customers, making any sales promotion that rewards referrals a potent strategy to increase sales and earn trust.

Removal and recycling are crucial aspects of modern, environmental thinking. Carefully selected recyclers can extract value from used furniture, making this promotional strategy environmentally and socially sound, as well as cost-effective. Demonstrating this commitment to sustainability is another way of building brand trust with your audience.

Innovation

With a compelling 8 out of 10 of consumers asked reporting visits to multiple furniture retailers either online or physically before committing to one brand, leveraging the power of promotions to sway decisions in this incredibly competitive sector should be an essential strategy for any category manager.

Finding new and imaginative ways to introduce smart solutions to sales promotions will help furniture retailers gain more market share ahead of their competitors. At Opia, we partner with global brands to embrace creativity and create highly customised, data-driven and market disruptive promotions that strengthen customer trust and drive a sales uplift.

You learn more about our research on the furniture market by downloading our whitepaper ‘Uncovering Market Sentiment in the UK Furniture Sector’ here,

If you are interested in finding out more, get in touch.


Press Release: Sales Promotions Deliver Brand Loyalty and Not Just Sales

Sales Promotions can deliver sales, brand loyalty and help to shorten consumer renewal cycles says report from Opia

Effective use of sales promotions don’t just significantly influence the purchase of ‘slow-moving consumer goods’ such as consumer electronics or white and brown goods, they also deliver tangible customer engagement.

In the consumer electronics space in particular, highly engaging sales promotions drive earlier purchases of new models, shorten product refresh cycles, and even lead customers to buy a brand they may not have previously considered. These are among the key findings included in a new white paper from Opia, a global leader in strategic and tactical sales promotions.

In a sample of 500,000 claimed promotions designed and managed by Opia, 30% of people said that the promotion prompted them to purchase the product earlier than they had intended, while 27% were influenced to buy a product that they had not considered previously. A further 18% said they would not have purchased the product at all without the promotion.

Opia analysed data across more than 100 campaigns, such as Samsung, Dell, Google and LG, in order to determine customer perceptions and behaviours towards redemption-based promotions and how promotions can support product and category managers.

It presented the findings in the white paper, which reveals:

  • Customers appreciate buying a product with a sales promotion: 78% were satisfied with their promotion (33% very satisfied, 45% satisfied) and only 6% considered themselves to be dissatisfied.
  • Almost half (47%) of promotional claims lead to the customer signing up to the brand’s marketing preference, demonstrating an intention of brand loyalty.
  • ‘Gift with purchase’ promotions (e.g. a pair of high-end wireless headphones with an advanced smartphone) drive significantly higher engagement and sign up to marketing communications (close to 50%)
  • Consumer electronic brands attract even higher sign-up rates with 67% opting-in to future marketing communications.

Sales promotion experts at Opia believe that these positive results come from using in-depth knowledge of customer behaviour and market activity to design creative and intelligent sales promotion to the product manager’s objective: “What we know from experience,” says Laurent Kretzschmar, Commercial and Product Director at Opia, “is that sales promotions are often most effective when multi-layered, and tailored to a commercial need – and when they stretch beyond simply achieving sales volume.

“In a competitive market, real success requires more imagination and applied intelligence,” he adds.

If, for example, a brand is planning a new product launch then ‘buy and try’ or ‘free trials’ often works best with a strong ‘peace of mind’ message to new adopters; if it is a high value product then an expensive gift or generous cashback could be the most effective; and if the objective is to increase market share, then a trade-in of a competitor’s brand for your new model could be a route to competitive advantage (and one that can support corporate sustainability agendas).

“But whichever style of promotion you use,” says Laurent, “it shouldn’t be just about sales – it should be about protecting your margins and engendering customer engagement and brand loyalty for return business and future success. Whatever strategy we recommend we are always searching for consumer to sign-up to marketing preference after they have made their claim. It indicates strong brand engagement and that they want to be the first to know about new exciting products or exciting offers for these types of products in the future.”

Laurent agrees that sales promotions, like price discounts, have been described as the hard drugs of the retail sector, and are often misused: “They have a reputation for being a risky or expensive way of achieving sales volume,” he says. “They are often used to ease the pain in the short term but, as use increases, so does dependence and it becomes harder and harder to quit. But ‘quitting’ is not the solution,” he insists. “Instead, better understanding of how sales promotions work and the outputs you can expect are key to using them successfully.”

Laurent believes that some product manager’s thinking around sales promotions starts and ends with the many simplistic ‘cashback’ offers so frequently advertised, but even these are misunderstood:

“Cashbacks can be multi-layered and packaged as ‘Buy more save more’ campaigns based on purchase value thresholds designed using historical buying patterns. And alternatives such as ‘gift with purchase promotion’ for example, where a pair of high-end wireless headphones or smart speakers is given free in combination with the purchase or pre-order of a new smartphone model, performs extremely well,” he says. “They drive high engagement both from the visibility of the promotion and marketing message as well as from the potential future engagement of promotionally responsive customers who sign up to marketing communications – close to 50% – compared to cashback offers which result in 25%.

“The drawback with poorly designed cashback offers or complex trade-ins can be that while they appear to provide a differentiated marketing message, they are often seen by customers as unattractive and not different to small price discounts, failing to drive sales uplift as well as yielding long term engagement.”

Download the whitepaper here


Introducing Opia Cloud: The Innovative Platform That Makes Sales Promotions Easy

For product and category managers seeking to boost their sales and protect their margins, Opia offers a flexible, robust, and scalable solution that makes managing sales promotions easy to launch and more efficient to run. Opia’s newly released proprietary sales promotion software, Opia Cloud, brings together a full suite of digital capabilities to build the best and biggest promotions for its clients with minimal effort required on their part.

With over 15 years of experience as market leaders in designing and delivering highly responsive sales promotions for the world’s most successful companies, Opia knows what is needed to offer clients the most value from this software.

Adam Nicholson, Director of Technology, commented, "Our clients are always telling us that they love our flexibility and ability to create campaigns tailored to their needs. The truth is that Opia Cloud is the secret sauce which enables us to do that.”

From branded interfaces and claim processing all the way to reward payment and gift or trade-in logistics, Opia Cloud has the functionality to rapidly launch and run sales promotions that provide a seamless, on-brand customer engagement.

Opia Cloud creates omnichannel experiences using trusted customer interfaces over multiple touchpoints, such as mobile responsive microsites, apps and social media, voice assistants and smart devices.

Translating promotions and end-to-end customer notifications to run in multiple languages and localising the messaging to be market-relevant supports customer engagement worldwide. Furthermore, with a multilingual user-matched interface delivering 24/7 customer service, clients can have confidence in seamless promotion management wherever their customers interact.

Commenting on the thought behind the design, Adam continues, "The platform was designed from the ground up to be hyper-flexible, with an architecture of building blocks that can be re-assembled in various shapes and sizes to produce different end-solutions. And, as a result of re-using tried-and-tested platform features, we can guarantee a high-quality result every single time."

This approach is evident in Opia Cloud's choice of pre-defined and customisable mechanics, such as cashbacks, free gifts, trade-ins and referrals, proven in their success in delivering an optimum ROI. In addition, all promotions are set up with Opia’s recommended suppliers that make promotion management entirely hassle-free. From fast and convenient payment solutions, digital and physical gifts fulfilment and sustainable recycling of unwanted products, Opia Cloud guarantees an easy-to-use, high-quality experience for all users.

Opia Cloud gives brands complete visibility and control with an online dashboard providing real-time reporting of every metric of a promotion, from tracking claim and redemption volumes and status to monitoring retailer and reseller participation and performance. Capturing customer insights, marketing opt-ins and surveys, the cutting-edge technology behind this platform provides the analytics to drive optimum promotion results.

Trusted by the most demanding and complex brands, Opia Cloud encompasses the best in fraud prevention and data protection by design. Tailored to each client's unique requirements, there is the option for an entirely self-contained experience managed completely by Opia or a secure API integration with clients' internal systems.

Notorious for its market disruptive approach, Opia has once again leveraged deep insight and imagination to develop a platform that delivers exceptional results for every aspect of its clients’ sales promotions.

Contact us today to discuss how our sales promotion software and bespoke redemption solutions can help your business to drive sales, increase brand loyalty and surpass the competition.


Forever Young: An Innovative Environmental Focus from Prénatal

Prénatal takes a first-of-its-kind environmental focus, promising to extend the life of its children's products by rewarding customers who choose to recycle within a designated time frame. The retail group, a European leader in children's products and clothing with 253 stores, is offering its customers a gift card reward of up to 50% of the purchase value when they take up this offer on their modular systems, strollers, car seats or cribs. This innovative promotion, Forever Young, provides not only a financial benefit for families but also a wider gain for the environment.

Launched in France in 1947 and opening its first store in Milan in 1963, Prénatal is now the point of reference for parents in Italy, Spain and Greece. Offering an extensive selection of the world’s top childcare products, the brand also has a wide range of dedicated specialised clothing for new mums, and bespoke clothes for newborns and children: all these exclusive creations are sold under the Prénatal label.

A leader in Europe in the retail of childcare products, Prénatal’s innovative campaign addresses a widespread, enduring problem. Families purchase brand-new children’s products, and their time-limited use means that most end up cast aside or stored away and forgotten in garages and attics. Prénatal’s goal is to extend the life of these under-used products, which remain in good condition.

The market-disruptive Forever Young promotion, running at Prénatal stores across Italy with plans to extend across Europe, is offering customers a 30-50% Prénatal gift card reward, when a product, purchased from their promotional lines, is returned within a 12-18-month window. The campaign is fully managed by creative sales promotions partner, Opia, who also take care of all the logistics, finding a new home or shape for the returned products through their managed recycling scheme.

With the sales promotion still running, the take-up is yet to be fully determined, but initial feedback is positive. Massimo Arioli, Business Unit Director of Prénatal, recognises that it is just the start of a journey that will remain ongoing. "In about a year, we will begin to see results; the first articles returned will be ready to come back to life and be useful in new contexts."

Remaining committed to a better shared future, helping families’ financial burdens and guaranteeing recycling that benefits the environment, he emphasises, “We are also eager to collaborate with third sector companies, who want to give further value to this ethical and sustainable process and therefore we will open a privileged channel for them.”

With Prénatal’s Forever Young video clearly conveying their commitment to these goals, we can look forward to a better future for unwanted children’s products, the children who have enjoyed them, their families, and the wider environment.

Find out how Opia can design innovative promotions that will drive your sales and optimise the lifetime value of your customers.


How to encourage upgrades from e-scooters to e-bikes

With the boost of electric power, the scooter, once reserved for children’s playground fun, has now become a common sight in cities across the world. Seen as an environmentally friendly way to avoid traffic jams, the e-scooter has become the go-to option for many inner-city commuters, but is it the best solution?

Reviewing the growth of the e-scooter market, we explore how e-bikes offer a better alternative for commuters and recreational travel and share how to use sales promotions to encourage customers to upgrade from an e-scooter to an e-bike.

The e-scooter market in 2020

The interest in e-scooters was growing pre-pandemic with sales up annually by nearly 100 per cent at the start of the year.1 The reasons behind this rise could be attributed to increasing environmental awareness or improvements in technology that made travel by e-scooter more viable. The health concerns and social distancing restrictions imposed as a result of COVID-19 only accelerated this growth. Halfords has reported an increase in sales of e-mobility products, including e-scooters and e-bikes, of more than 230% since April 2 while the Bicycle Association estimates current UK ownership of e-scooters at 200,000.3

Weighing up the best e-product option

Could there be a dose of novelty factor when purchasing an e-scooter? One that leads to a point where a more suitable alternative is then considered? Richard Thorpe, the founder of Gocycle, sees this as an opportunity for e-bike sales:

“I think the e-scooter market is a really interesting one because I think it's an amazing natural feeder for new customers that are going to want to upgrade to e-bikes after they've gone through their initial phase of fun and exhilaration of commuting on an e-scooter, and then realised that it’s quite a stressful commute to do that daily.” 4

Affordability is also likely to be a key factor when choosing an e-product, with most e-scooters costing less than the average e-bike. However, in terms of value and overall practicality, the e-bike stretches ahead with its advantages.

Long term, the e-bike is better for the wallet and the environment. Its battery lifespan lasts for an average 3-5 years5, compared to the 1-3 years of an e-scooter.6 When factoring in comfort and convenience, the benefits of an e-bike makes it clearly the better option. Its sitting position and storage compartments for laptops and bags allow for much more comfortable travel. And, with the added benefit of being able to pedal should it be desired or required, an e-bike offers increased flexibility for longer trips.

Promoting the upgrade

The practical advantages of an e-bike may be apparent to your customers. Still, when making their choice, certain purchase barriers may remain, particularly if they are venturing into purchasing an e-product for the first time. The question then remains, how do you encourage upgrades from e-scooters to e-bikes?

Removing purchase barriers can be achieved using creative, tactical sales promotions. These strategies will boost confidence in the product, offer reassurance in the purchase decision and make the price-point more appealing to customers looking to upgrade.

Here are our favourite sales promotion tactics that are proven in incentivising customers to upgrade their products:

Trade-ins

Design a creative campaign around a time-limited trade-in promotion and customers will be motivated to upgrade their current e-scooter to an e-bike alternative. By adding in a reward, either with cashback or a relevant gift, alongside the prospect of a new e-bike for trading in a current e-scooter, you can use this promotional mechanism to shorten refresh cycles and motivate product upgrades.

Cashbacks

Cashback promotions are an effective strategy for removing price purchase barriers. This innovative alternative to costly traditional discounting offers customers savings on their purchase, in this case of an e-bike, driving a sales uplift while still protecting a brand’s bottom line.

 Buy and try

For new or unfamiliar, higher-value products, such as e-bikes, giving customers the option to ‘buy and try' offers reassurance in their purchase decision. With a no-obligation trial period, where customers can return their product if desired and receive a full refund, risk considerations are removed, and product sales are uplifted.

Opia makes running these sales campaigns easy, with our end-to-end promotion management service. From campaign design and platform set-up to claim handling, collections and recycling, we focus on making the process easy and hassle-free for you and your customers.

There are definite advantages to purchasing an e-bike over an e-scooter. However, for some customers, reservations remain. Using smart sales promotions, such as the strategies suggested, alongside imaginative marketing campaigns, will help to persuade customers to make this upgrade from an e-scooter to an e-bike.

To find out how we can help you motivate customer upgrades on your product lines, please get in contact with our team.

 

1 https://www.thisismoney.co.uk/money/cars/article-8435691/Are-e-scooters-greener-transport-future-menace.html

2 https://www.theguardian.com/uk-news/2020/oct/07/the-e-scooter-road-menace-or-saviour-of-the-commute

3 https://www.bicycleassociation.org.uk/e-bikes-vs-e-scooters/

4 https://electricbikeaction.com/the-go-behind-gocycle/

5 https://www.bicycling.com/bikes-gear/g20045132/your-ebike-questions-answered/#

6 https://www.electricbikescootercar.co.uk/how-long-do-electric-scooters-last-before-you-need-to-change-the-battery/


Why Avoiding the Discounting Trap is Critical for the Profitability of Furniture Retailers

The relentless sales from big brand furniture retailers are something to which we’ve all become accustomed. Boxing Day, the summer season, and, only shortly around the corner, Black Friday all begin to merge into one rolling tide of price cuts, resulting in customers always on the lookout for discounts and yet never really believing they are saving money from these ever-lasting offers.

Competing in this environment is tough, particularly during a year when sales of high-value goods, like furniture, have been so turbulent. We review the impact of this discounting trap, created by high-profile furniture brands, before exploring how to avoid discounting products through the use of smart alternatives that can boost sales without being detrimental to your bottom line.

The curse of the discounting trap

Black Friday is on the horizon, on the 27th of November. As always, significant price cuts are expected. However, despite the hype, there is a sense of discount-fatigue, particularly in the furniture sector. Too many cut-price sales by well-known brands have meant that these ‘special’ prices just don’t feel as special any more.

Trying to compete with this level of price-cuts is challenging, particularly for smaller retailers where margins aren’t so big, and it becomes simply unviable for their profitability.

An erratic year of furniture sales

Furniture manufacturers and retailers have been on a bit of a roller-coaster ride with their trade throughout 2020. The lockdown in March saw manufacturing forced to stop and retailers close their doors, leading to many employees being furloughed.

At the same time, the lockdown travel restrictions also created customers with more money to spend and wanting to improve their home, where they were now spending so much more time. Online orders soared, and when retailers opened their doors in mid-June, business began booming.2

The repercussions of this spike in sales is a shortage of foam and particleboard, reducing production capacity and driving up costs in the run-up to Christmas3. Furniture retailers have been left needing to pass on these increases or close their order books early at a crucial time.

However, the industry is under no illusion. This rush of sales could quickly turn as the country faces an economic downturn, and they deal with the added complication of Brexit also interrupting material supplies.4 A clear, effective strategy is needed to retain profitability, and, for many furniture manufacturers, traditional discounting is not the answer.

The long-term impacts of discounting

Traditional price cuts are used to drive footfall into stores and create a sales uplift across specific product lines. And it works – for the short term. However, these untargeted price discounts are an extremely costly way to boost sales, unnecessarily cutting sharply into your margins. Recovering your full-price position also becomes very difficult, leading to a discounting trap, which can have disastrous long-term effects on your bottom line.

Furthermore, with so many furniture retailers using discounts to attract their customers, the impact is becoming lost, and promotions of this kind lack any point of difference against competitors.

It is vital that furniture retailers understand how to avoid discounting products whilst retaining sales if they are to remain profitable. The good news is there is a smart alternative to traditional discounting that protects margins and offers the same, if not improved, motivation to buy.

How to avoid discounting products – alternative solutions

There is a range of innovative sales promotion solutions that can be used to engage your customers, drive a sales uplift and deliver improved profitability.

Designing a creative campaign, using tactical promotions, will create the same buzz around a product as upfront discounts. Proven in effectively removing the purchase barrier, they provide brands with a much more cost-effective method of promotion.

Examples of these promotional strategies include cashback campaigns, gifts with purchase or instant win offers:

  • Cashback rewards highlight customers’ savings and motivate purchases without the need for upfront discounting.
  • Gift with purchase promotions work on a similar basis, presenting better-perceived value for the customer with the addition of a specially selected, market-relevant gift.
  • Instant wins campaigns use high-value, sought-after rewards with the added excitement around a competition to drive sales.

Securing longer-term profitability, particularly during a climate of uncertainty, will also be immensely valuable to your brand’s future. Strategic sales solutions strengthen brand loyalty, shorten refresh cycles, widen your reach and lead to an increased share of the customer wallet.

Mechanics that achieve these goals include referral and rewards programs, which use strong incentives to drive recommendations and reviews, and trade-in promotions, which offer time-limited rewards to motivate product upgrades.

Creating smart sales promotions provide customers with a compelling reason for purchase without the need for costly upfront discounting. Working on the basis that only the most engaged customers make their claim, promotional costs are significantly reduced – often by up to 50%!

Furthermore, driven by market insights, these innovative and unique campaigns create a point of difference when compared to competitors' relentless discounting.

In a highly competitive market, finding cost-effective solutions that allow you to avoid the traditional discount trap is critical. And with a discount-fatigue setting in and an increased sense of uncertainty about the actual savings being made, campaigns that offer something of value are shown to be highly responsive.

To find out more about how Opia creates market disruptive promotions that allow your brand to stand apart from your competitors, engage customers and drive a sales uplift, please get in touch with our strategy team.

 

1 https://www.idealhome.co.uk/news/black-friday-257538

2 https://www.theguardian.com/business/2020/oct/10/covid-boom-uk-furniture-firms-sitting-pretty

3 https://www.furniturenews.net/news/articles/2020/10/940782193-material-shortages-affecting-furniture-production-and-pricing-says

4 https://www.business-live.co.uk/manufacturing/manufacturer-reveals-how-lockdown-led-19019417

 

 


When Bicycle Demand Exceeds Supply: 3 Creative Strategies for Upselling

Earlier this year, we wrote about the unprecedented demand for bikes brought about by the pandemic. Demand for bikes was outstripping supply and manufacturers needed creative solutions to support retailers in satisfying their customers' requirements. Although the lockdown rush has slowed somewhat, stock of entry and mid-level bikes is still low. In this blog, we explore this challenge further, before sharing some innovative ideas for sales promotions that can help boost sales with strategies for upselling in the retail market.

 A summer high that led to sell-out bike stocks

Social distancing restrictions and encouragement to use other means of transport during the pandemic had an enormous effect on bike sales. Data from the Bicycle Association has now confirmed that between April and June 2020, bike sales increased by a massive 63% year-on-year.1 These sales were strongest for bikes under £1,000. As health concerns continue and the focus on environmental benefits increases, this demand is set to continue, but perhaps not at the same colossal rate. The UK will likely follow the same trend as the US, where July saw the highest value of bike imports at $151 million. Although a slight taper was seen in August, at $142 million in imports, this is still an increase of 24% when compared to the same month last year.2

Facing an autumnal challenge of demand exceeding supply

The bike market has been left with vastly diminished stocks, with entry and mid-level bikes sold out, and, despite the peak in sales being in the summer, new stock cannot be produced quick enough, and any that is received is likely to sell out fast. To maintain a good level of sales and keep customers brand loyal, manufacturers need ways to motivate customers to make a more expensive purchase, without resorting to discounting their bikes and impacting their longer-term profitability. Understanding strategies for upselling has therefore never been more important.

3 unique and innovative sales solutions

Buy & Try, Satisfaction Guarantee Promotions

Customers are often hesitant when faced with making a more expensive purchase or trying something new that’s out of their comfort zone. Tackle this uncertainty by adopting a sales promotion that overcomes the purchase barrier and gives your customers confidence in their buying decision.

For example, a Buy & Try promotion can offer a risk-free, no-obligation trial period. Customers have the opportunity to try out their new bike with the option of returning it, if not suitable, and quickly obtaining a refund. Taking out this risk consideration creates a sales uplift of these higher-value products.

Job Safe Schemes

Particularly at this time, the future of many people’s jobs is uncertain. This unfortunate circumstance means that customers may worry about making a higher-value purchase, losing their income and then not being able to afford the payments.

Remove this concern by offering a cashback option should an individual lose their job. A redundancy refund policy, such as our Job Safe scheme, acts to boost buyer confidence. When a customer enrols in this scheme, if they lose their job in the following 12 months, a payment of 50% of their purchase is made directly to them.

Basket Boost Campaign

A Basket Boost campaign, where customers receive cashback on their purchase when other store accessories are purchased alongside, is another method of removing the purchase barrier and allowing room to upsell. This strategy delivers increased sales in two ways; firstly, by providing the customer with a better-perceived value, and secondly by giving your brand an advantage with the retailers. Stores are far more likely to showcase your line of bikes if your promotion encourages further purchases at the store.

Shortage of certain product lines does not have to mean a loss of customers to rival competitors or a drop in prices that hurts your bottom line. With imaginative thinking and relevant, targeted campaigns, you can run sales promotions that drive volumes, protect your margins and strengthen customer loyalty for future profitability.

To find out more about how we can support you with your upselling strategies, please get in contact with our team, who will be pleased to explore the opportunities with you.

 

1 https://www.forbes.com/sites/carltonreid/2020/08/03/bike-sales-increased-63-during-lockdown-reveals-uks-bicycle-association/#6f86a3177e12

2 https://www.bicycleretailer.com/studies-reports/2020/10/06/bike-imports-24-august#.X32G42gzY2w