Halloween is over, Singles’ Day too, Cyber Monday is coming on 02.12.2019. Who doesn’t proliferate everything with new sales record figures? On Singles’ Day, the Chinese “Cyber Monday” on 11.11., Alibaba, China’s online trading giant, made almost 39 billion US dollars in sales within 24 hours according to Focus Money Online. WirtschaftsWoche reports that customers had already spent $12 billion in the first hour. But Germany is also taking part in the discount battle: On 29.11. Black Friday will take place again, with Amazon, Otto & Co. customers with discounts. Will you also be there when the discount battle reaches its annual climax? Oh yes, nobody talks about Christmas and WSV anymore. But hardly anyone talks about contribution margin and profitability either. No one dares?
Don’t you have record figures to present? It doesn’t matter. Because before you jump on this hype train like a lemming, you should stop for a moment and think about it or analyze your customers.
As a long-standing mail-order company and e-commerce specialist, we used database marketing analyses many years ago to carry out an analysis on several occasions and found that
The additional turnover in one month is by no means additional turnover for the whole year. Very simple – an aggressive promotion (like something Halloween, Cyber Monday, Singles Day or Black Friday) leads to a changed customer behaviour! The customers postpone the purchase process to these “hot days”. Among other things Idealo describes how you can save money and therefore causes this behaviour.
And whether this is worthwhile or not, is to be checked. Otherwise only one thing happens: The company takes the path into the death spiral “discount, discount and only discount”. One never gets out of this spiral unscathed. The contribution margin suffers, the brand fades. At what cost?
Please take your time to watch this video
and then check to see if it was really worthwhile. If not, then please refrain from participating in the discount battle as soon as possible and do not be impressed by the insane numbers.
By the way: The marketoonist Tom Fishburne sees it the same way in his latest cartoon – read the article here!
Note: This is a machine translation. It is neither 100% complete nor 100% correct. We can therefore not guarantee the result.