As a growing number of retailers are embracing Shopify free gifts with purchase, they can drive consumer loyalty and increase sales. The competitive nature of the eCommerce landscape has many retailers competing for the same consumers and making it very hard to attract new customers to their website. Today’s consumers consider the price when purchasing, but they are not going to purchase unless they feel like they are receiving something special or valuable in return.
With so many brands competing for the same consumer’s attention, using a gifting strategy is an ideal way to motivate potential customers to increase their cart size, spend more than what they initially planned and keep returning for repeat business.
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Why customers respond to incentives
Current consumers expect to see things of value offered to them, be recognized and be happy to have bought something. Discounts alone don’t sell for today’s consumer. Consumers may simply see “10% Sale” as just another ad. But when they see a store with a specific reward (e.g. Buy $75 worth of product to receive a gift), that particular store creates an environment of difference and they regard that store as special. Because they feel as if they are a part of something that provides value (e.g. They receive something extra). This motivates them to shop.
Shopify’s free gift incentives is an example of this persuasive science. Shopify utilizes this incentivizing strategy to do three things, which all business owners want:
- Increase the average order size at checkout
- Increase the cart dollar amount without using additional advertising
- Create a rewarding feeling and excitement surrounding this reward-based strategy and how it functions for consumers
When consumers perceive that they are almost invalid in a purchase and may receive a bonus for purchasing, they often do not abandon that action during purchasing. They take action.
Why Shopify store owners need this strategy now
The current environment for entrepreneurs on Shopify is tough. Google has introduced AI-powered shopping Ads and Meta has priced ads higher than in previous years. Competing stores are discounting heavily, leading to decreased customer loyalty every year. A new Shopify store needs to create trust with potential customers before they can reasonably expect to make larger transactions with those customers.
The Free Gift With Purchase Method allows the store owner to create and build customer trust by providing a reward for the customer delivering a commitment to the store. The Free Gift With Purchase satisfies the customer’s curiosity about how much a company values its customers. With Shopify Free Gift With Purchase the store owner doesn’t have to give up as much profit margin as with deeper percentage discounts. However, the Free Gift With Purchase can help to create perceived value for customers, thus preserving profit margins.
In a society that is heavily influenced by the emotional rewards of shopping, anything that can trigger these emotional rewards can greatly assist with increasing conversions. This is one of the main reasons that the majority of modern DTC brands do not have a Discount Blast, but rather focus on using Free Gifts with Purchase.
Understanding the Psychological Factors Associated With Reward-Based Selling
Sales Are Based Solely Upon Emotional Triggers. This is where the principle of reciprocity comes into play; People Who Receive Value Feel Obligated To Return Value Back To The Giver. This Is Also Why Free Samples Were Successful Long Before The Internet Existed and How The Free Gift Shopify Program Has Taken The Same Principle And Converted It Into A Digital Transaction.
Emotional Triggers Are Created Through The Following Steps:
Step #1: Customer Receives A Possible Reward
Step #2: Customer Sees A Spending Goal
Step #3: Excitement In The Customer For Reaching Their Goal In Step #2
Step #4: Customer Experiences A Sense Of Reward At The Time Of Checkout
BOGO, bundles and multipliers
Gift-giving and incentivising sales through aggressive volume control such as BOGO (Buy One Get One) create an effective way for entrepreneurs to quickly sell excess inventory while maintaining the brand’s reputation.
In addition to selling out excess inventory using these types of promotions, Shopify also offers tiered reward programs to encourage customers to continue purchasing at higher levels;
Spend $50 – receive a small gift
Spend $100 – receive a premium sample
Spend $150 – receive a limited edition product
The curiosity and desire to receive valuable rewards creates an opportunity for increased average order volumes (AOV).
This leads to an increased interest from customers and a high likelihood that they will purchase products with higher price points.
The psychology of gift incentivising vs discounting
New entrepreneurs learn a painful lesson about discounting: it hurts margins and brand perception.
Once the customer becomes accustomed to receiving a discount, they will never pay full price again. The concept of a free gift with purchase changes this instead of discounting, the entrepreneur adds value to the customer they keep their prices intact, while keeping the profit margins stable.
Many top cosmetic brands have taken advantage of this model for decades, by giving the consumer a variety of free samples and other products that are worth considerably more than the discount.
The customer leaves happy and excited, feeling great about receiving a gift and that they didn’t cheapen themselves.
Entrepreneurs using Shopify no longer have to wai it can happen in minutes, using this luxury strategy.
Support, branding and customization give control back to the entrepreneur
Many retailers feel uncomfortable allowing others to design their promotional items due to the fear of losing control over the design. Retailers want promotional products to be perceived as high-quality items and not spammy. Advanced gifting applications enable store owners to customize everything about the product experience fonts, colours, messages and where the product appears on the site so they can provide a completely branded experience for their customers.
Additionally, the support merchants receive in the form of customer reviews helps them understand they will receive assistance should they require assistance setting up their store. Many entrepreneurs also face checkout limitations if they are not on the Shopify Plus plan, but they can rely on smart software solutions to provide them with solutions to these issues, including compliant options that help them navigate the limitations with features like auto-add-to-cart, pop-up displays and selection screens.
Removing any friction point from the shopping experience is a step toward generating revenue for a business.
Gifting creates long-term customer loyalty
It’s no secret that the initial purchase is important; the second purchase is what creates a business. Entrepreneurs rely on the customer’s lifetime value.
The gifting experience creates lasting memories for the customer:
- They received a gift
- They unwrapped a gift
- They will return to have another enjoyable gifting experience
Entrepreneurs do not create an addiction to discounts, but rather they create anticipation for future gifts through a customer’s emotional response to a gift they received. This emotional response can turn first-time customers into loyal, repeat customers.
Merchandising Advantage for Entrepreneurs
Every entrepreneur faces common issues such as a need for better merchandising for their new product(s) or rotation of slow-moving SKUs (stock keeping units) and clear-out for seasonal items. The solution for all three of these issues is the Shopify Free Gift With Purchase Tool, which allows an entrepreneur to create emotional appeal while creating awareness through product placement.
Example – When a new fragrance is launched and the customer receives a free sample of that fragrance at the time of purchase, if the customer loves the scent, they are likely to return to buy the full-size product(s). Thus, the cost of the fragrance sample has become an investment in future orders. The entrepreneur has not wasted their money on marketing; they have only reallocated that marketing, which would have occurred in another way, to the moment that creates the highest emotional impact with their consumer.
Reason This Strategy Fits The Entrepreneurshiplife Audience:
Entrepreneurshiplife is all about offering solutions that are practical and generate revenue, not just offering a ‘theoretical solution. It will allow a small business owner to operate like an established brand and therefore create opportunities for growth without risk-taking based on expensive advertising.
The Future of Incentive-Driven E-Commerce
Wise Brands Offer Greater Rewards Rather than Just Volume – They Utilize Emotional-driving Incentives for Long-term Growth. Brands Need More Than Just Money to Grow. To Grow, Brands Need to Understand How to Create Customer Motivation.
Therefore, Shopify Free Gift with Purchase is the New “Normal” for Growing E-Commerce Businesses.
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