March 28, 2018

How an Australian retailer utilises coupon codes to increase AOV

Two people with a laptop and a tablet shopping online on a table with gift wrapping paper

Introduction

Coupon codes (also known as voucher codes) are extensively used by commerce businesses and their customers. Their various structures have been written about at length, and we’ve discussed the value of voucher code websites in the past too. In this blog we discuss how a Sports Retailer uses coupon codes to increase Average Order Value (AOV), acquire new customers and increase their eDM database.Sportitude are an Australian sports equipment and apparel retailer based in Adelaide, South Australia. As well as having 3 stores in Adelaide, they sell a huge range of Running, Trail and Netball shoes, as well as apparel and sports equipment. Navigate Digital has managed their Affiliate Programme since March 2016.

Analysis

Sportitude uses coupon codes in 3 ways:- On overlays to drive acquisition to the Sportitude newsletter, served to new customers.- As time-limited ‘spend and save codes’ e.g. Save 10% when you spend $200, Spend $200 and save 10%. These codes are structured to exceed typical AOV.- As brand specific discounts e.g. Save 10% off Brooks, Save 10% off ASICS.In an analysis of more than 7,600 conversions, AOV increased by 6.1% where a code was used. In the final month of the analysis, AOV increased to an enormous 9.7%, in part due to some changes to the checkout process. This is consistent with research conducted in 2011which showed that ‘visitors to coupon websites spent 13% more and expect to spend 16% more, on average, than the typical online shopper’ (Forrester/Whaleshark Media, 2011).Such incremental changes make an enormous difference to profit per conversion and, over the course of thousands of conversions, a healthy contribution to their bottom line.

Summary

Following Sportitude’s example, brands should carefully consider the use of discount codes. They must form part of a value exchange; for example, investing in them on hero categories where they can drive AOV, gaining an email address for future marketing, or gaining an investment in the lifetime value of a particular customer (knowing that the satisfied individual will come back at the beginning of the next Netball season, or as they start to train for their next marathon).It is also worth considering the ancillary benefits to the smart use of code, including the reduced time to conversion which may reduce spend on retargeting with biddable media.Get in touch to find out more on how coupon codes can be beneficial within Affiliate Marketing programmes.For further reading on coupon codes and their effective use:The Value of Voucher Code Partners5 Steps to a Healthy Affiliate ProgrammeManaging Advertiser Voucher codesThe Impact Of Online Coupons And Promotion CodesBy Matt Sheppard, International Account Manager

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