Optimizing Promotions for Your Store

There are thousands of different promotions a store can use to attract and boost business. Whether it’s 20% or $5 off your next purchase, many managers check a few cost figures and then arbitrarily throw their favorite promotion into action. By tracking and testing your different promotions, you can optimize and run the most effective sale

The Nuts and Bolts

One great metric to give you a high-level understanding of promotion effectiveness is MROI (Marketing Return on Investment)

MROI = [Gross Profit – Marketing Investment] / Marketing Investment.

A Few Things to Know About MROI

  • ‘Marketing Investment’ includes the cumulative cost of the sale discounts and the total cost of running the promotion.
  • Gross Profit = # of Units Sold x [ Average Selling Price – Average Cost of Unit ]
  • If you don’t know the Gross Profit or Cost of Goods Sold, Gross Sales from the promotion will work in a pinch. Just be sure to be consistent when comparing your MROI figures.

Putting This into Practice:

Your store just finished a promotion for 15% off all jeans in the store before heading into summer. Before you ran the promotion, the Average Selling Price of the jeans were $100, and your Average Cost of per pair was $40. You also spent $2,000 promoting the sale on Facebook and Adwords Campaigns. The Average Discount per pair of jeans was $15.00 [$100.00 x 15%]. After the dust settled and the promotion was completed, your store sold 150 pairs of jeans.

Gross Profit = # of Units Sold x [ Average Selling Price – Average Cost of Unit ]

Gross Profit = 150 x [$100 – $40] = $9,000.00

Remember, Marketing Investment includes both the price of the discounted items AND advertising. In this case, the Average Discount was $15 and we sold 150 pairs of jeans. Marketing Investment = $2,000 + [$15 x 150] = $4,250.00

Now let’s plug in all of our figures.

MROI = [Gross Profit – Marketing Investment] / Marketing Investment.

MROI = [$9,000.00 – $4,250.00] / $4,250.00 = 111.76%

Testing, Comparing and Optimizing Your Promotions

All of this basic data is helpful to understanding the success of an individual promotion, but by keeping track of a few other factors – we can start building a powerful tool.

  1. When did the sale take place? Was it around a seasonal change, holiday or something else?
  2. Was there a specific the promotion was for? Sometimes there are storewide sales, but it’s important to note if its specific to things like accessories or shirts.
  3. Lastly, note what kind of promotion it was. Did you offer a percentage off or was it a dollar amount the purchase?

Storing each promotion into Excel or Google Sheets is a best practice. Keeping this historical data and promotion performance makes it easy to see which types of campaigns perform best at any given time – comparing apples to apples.

It’s important to know your channels and which are the most effective for getting the word out for a given promotion. Sandbox Commerce’s push notification tool is a great way to engage and keep customers up to date.

Keep experimenting and build off your historical data – you’ll soon be maximizing the profits of every promotion you run.

Why Did Walmart Change It’s Name?

On February 1st, after 47 years being known as Wal-Mart Stores, the world’s largest retailer will officially change it’s name to Walmart Inc.

Big deal, right? Most people (myself included) probably didn’t even realize the official name was Wal-Mart Stores until they announced the name change in December. So why does it matter? While the new name won’t inherently change anything about how Walmart does business, it represents a greater shift to embrace a more omnichannel future.

In the words of Doug McMillon, Walmart president and CEO “Our customers know us as Walmart and today they shop with us not only in our stores but online and with our app as well.” He continues to explain that “While our legal name is used in a limited number of places, we felt it was best to have a name that was consistent with the idea that you can shop us however you like as a customer.”

As companies like Amazon.com Inc continue to challenge Walmart’s position as top retailer, the company is putting in place a very effective strategy for staying ahead. The focus is being put on e-commerce, and the seamless integration of the Walmart online store and app with the in-store experience. Walmart has begun making these strides by acquiring Jet.com and Bonobos, offering two-day free delivery, further integrating stores and e-commerce, and improving its mobile shopping app. These changes have already led to a 50% increase in online sales in the U.S. over the past three quarters, which is more than triple the pace of the broader e-commerce sector, and this is only the beginning.

Walmart and Google have recently teamed up to tap into the voice-shopping market, which was previously dominated by Amazon’s AI virtual assistant Alexa. While Alexa lets U.S. consumers shop directly from Amazon, people are now able to buy Walmart products in a similar way—using the voice-activated Google Assistant platform on their phones and home devices.

These changes being made by the biggest retailers like Walmart and Amazon are important indicators of the future of retail. For smaller companies, looking at the things that the large retailers focus on can be a key way of staying ahead of your competitors. After all, Walmart has been at the top of the retail game for years, and it looks like they are staying there, or at least putting up a good fight. Though it may seem like a small change, Walmart’s new name shows the importance that this company puts on providing a seamless, omnichannel retail experience to their customers. Do you provide this? How integrated are your app, website and store? Walmart and Amazon seem to think that voice shopping is the next big thing, so maybe it’s time to start looking into this technology for your own retail business.

Need help updating your retail app or website? Thats what we’re here for! Start your 30 day free trial of Sandbox Commerce now!

Black Friday 2017: The Biggest Mobile Shopping Day Ever

The Holiday Season is rapidly approaching, which means it’s time for the US to kick it into high gear and do what we do best: shop! With the gross sales and number of Black Friday shoppers increasing steadily every year, we are poised to have one of the biggest Black Fridays on record. The holiday promotions continue to start earlier and earlier each year, which means retailers need to do everything possible to stay ahead of the competition and make the most of this season.

Recent data has shown that the steady shift in shopping habits from brick and mortar to online and mobile has reached a new height: while Black Friday 2016 was the first $1 billion mobile shopping day in the US, Black Friday 2017 is set to top this, making it the biggest mobile shopping day ever recorded. According to data gathered by App Annie, this year during the week of Black Friday the US is expected to spend nearly 45 million hours in shopping apps on Android phones alone, which is over a 45% increase in the past two years.

For retailers this is great news. More time spent in apps means more purchases are made, which increases revenue and creates more loyal customers.

To break this data down further, we anticipate that in the US on Black Friday well over 6 million hours will be spent on Android phones alone in the top five Digital-First apps, which include retail apps with little to no brick and mortar presence. This shows a 40% increase from last year’s Black Friday. The top five retail apps that also have a prominent brick and mortar presence aren’t expected to have quite the same level of time spent in-app, but the data shows that they should see 30% growth in time spent from last year.

This rise in mobile commerce use also means that mobile retailers have a greater opportunity to reach overseas markets. In Japan, it’s expected that there will be a 65% increase from two years ago in time spent in shopping apps, and about a 45% increase in the UK.

In light of this data, it’s more and more apparent that retailers (whether digital-first or traditional) need to prioritize mobile, especially during this holiday season. By optimizing mobile traffic and user acquisition during Black Friday when consumers are the most active and willing to make purchases, retailers can set a trajectory for continued growth and engagement that could last far beyond the promotional period itself. Retailers should prioritize user acquisition and engagement over all else, and here are a few things to focus on:

  1. App Store Optimization (ASO): Retailers should give the most people the highest chance possible of finding and downloading their app, and this comes down to ASO. Check out our article on how to improve ASO for the full run down on how to do this.
  2. User Engagement: App-exclusive deals, promotions and rewards are the key to upping user engagement. For retailers with a brick and mortar store as well as mobile, leveraging the physical store to complement and promote the app can be a very effective strategy as well.
  3. Marketing: The weeks leading up to Black Friday is the time when retailers can get the most bang for their buck in terms of ads and marketing. Our article on how to drive traffic to your e-commerce app is a helpful asset to learn more about how to optimize marketing at this critical time.

Overall, it is expected that retailers will buckle down on their mobile strategy this Black Friday, and ignoring the data could be very detrimental to a retail business. Sandbox Commerce is the number one provider of native apps for e-commerce, and we are highly experienced in creating seamless customer journeys that include native apps, automated push notifications, and email marketing integration. During this time when mobile commerce is on the rise with no end in sight, it is vital that retailers create high quality mobile apps that will optimize their business. Contact us to improve or create you mobile commerce app today!

7 Common Problems Brands and Retailers Face When Building a Mobile App

Let’s face it — Building a mobile app to showcase your product’s and engage with your customer’s is incredibly risky! On average it takes a retailer 6 months and costs $120K per app store to go to market. So before you go off trying to build a Mobile App or Progressive Web App (PWA) on your own, I’ve saved you the headache by outlining the top 7 issues you might face as a retailer: 

1. Learning the Languages, or Hiring a Developer who Knows what they’re DoingMobile and Progressive Web App (PWA) development is ever-evolving. Hiring skilled developers with a proven track record of delivery is risky at best and outsourcing development overseas is pretty much out of the question. Your already have a team of rockstar’s that have helped you build your brand but even your website designer’s don’t have the time to learn how to build a Mobile App or PWA from the ground up! 

2.  Should I build a Hybrid App or go fully Native — What does ‘fully Native’ even mean??Shopify or BigCommerce? MailChimp or Klaviyo? Tomayto or Tomahto? You’re constantly faced with decisions about where to devote your companies resources. You’ve considered building a mobile app and believe that IF it were to accurately represent the uniqueness of your brand to your discerning customer, it may serve as an effective marketing channel. But is a responsive website enough anymore? Should you build a hybrid app or a native app? What happens if you make the wrong decision? Continue reading..

3. Mobile App vs Response Website: Analysis Paralysis
Because of the issue’s you might face when building a Mobile App from scratch, you should probably just stick with your responsive website, right?? Wrong. 

Native apps and PWA’s allow your customer’s to engage with your brand without a persistent internet connection, provide a superior user experience, allow your shoppers to receive push notifications and use their phone’s camera. In addition mobile apps out-perform responsive websites by 225%.

4. It’s Only a Foundation for Content
The process of designing and building an app is expensive and challenging enough. The reality is that your consumer’s don’t care about your backend. What drives adoption and conversion is the content that you use to populate your app and the customer journey you provide. You will see a much better return on your investment if you focus less on the infrastructure and more time on providing your shoppers with premium content that sets your brand apart.

5. Low Quality Product
If you attempt to save money by outsourcing to a freelance developer, it’s more likely than not that you’ll end up with a users experience that is significantly lower in quality than what you’d have otherwise. So you’ll add a mobile developer to your team, or repurpose your  front-end website developer who has little to no mobile app development experience and even less time.  While that might seem like the safer bet, you likely won’t receive the same quality app you would from a dedicated team that specializes in building apps for brands and retailers – but they’re unicorns. Very expensive unicorns!

6. Wait Until Next Year
“We could always wait until next year, right? That’s the safe bet.” – Walmart

7. Your Customer Data Can Die in a Silo
Many brands and retailers build and treat their mobile applications as a stand alone channel and revenue stream. They don’t integrate mobile shopping data into the rest of their organization, for maximum financial benefit and the best possible user experience. Once your mobile application is integrated to the rest of your business (inventory levels, email marketing, CRM, et cetera) you can begin delivering a seamless user experience that shoppers expect, selling more, using behavioral and demographic data. This increased customer satisfaction is proven to drive loyalty, net promoter scores, average order value and session visits, WAY UP.

When you incorporate your Google analytics credentials into your mobile app,  you’re ready to analyze and optimize the experience directly alongside your web-based eCommerce traffic.

Conclusion
Building Mobile Apps and PWA’s used to be risky, expensive and time consuming. Not anymore. SandBox Commerce is the most experienced vendor in creating seamless customer journeys, incorporating Native Apps, automated Push Notifications, Email Marketing Integration and Google’s new Progressive Web App best practices.

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