Black Friday is expected to be the busiest shopping day of the 2021 holiday shopping season. Unfortunately, in this day and age of hyper-competition, Black Friday has evolved from a cultural shopping experience to a more task-driven ecommerce event.

Between free shipping, fulfillment fees, and blanket discounts, Black Friday promotions can be extremely demanding on ecommerce margins. But you can still stay competitive and protect your margins over the Black Friday weekend.

Key Takeaways

  • Block coupon extensions and save 17 to 18 percent in margins.
  • Prevent unfair affiliate commission to control your margins.
  • Deliver a superior customer experience with behavior-based promotions.
  • Increase AOV by offering attractive discounts.

4 Ways to Protect your Ecommerce Margins

1. Block Coupon Extensions

Coupon extensions often position themselves as affiliate platforms, helping to drive more customers to online business, but in reality, they are not. They automatically inject discount codes at the last stage of the buying journey, on items shoppers are willing to pay a retail price for. 

Popular coupon extensions like Honey and Capital One Shopping scrape different codes (activity-based, audience-specific, most popular coupon codes, etc.) and share them with anyone who uses their extension.

When users install the Honey or other browser extension and apply a coupon code that they have genuinely earned or given by an ecommerce website, the Honey app will piggyback on such users and scrape codes they enter and save it in its database.

When other Honey users visit your website in the future, Honey will automatically find and apply coupon codes, whether users qualify or not. Studies on ecommerce sites suggest that online retailers may be losing around $1.6 million in revenue to coupon extensions.

You can tackle the challenges of coupon extensions by:

  • Delisting your website on the coupon extension platform (Good luck with that)
  • Hiding your biggest / popular discount code
  • Changing coupon codes manually
  • Blocking extensions completely

Blocking extensions is the best option for preventing coupon extensions from taking away your margins. Other options are manual, time-consuming, and may not work all the time.

Honey promises users an average discount of 17 to 18 percent. So, if you are looking to save money and protect your gross margins, block coupon extensions. 

There is no solution in the market that can automatically stop extensions from applying discounts at checkout pages. That is why we created a set-it-and-forget-it tool that will handle the dynamic nature of coupon extensions and block them without affecting the online shopping experience.

2. Prevent Unfair Affiliate Commissions  

Affiliate marketing is a promotional method that has been around for a long time. It is one of the most popular Black Friday promotion options and is widely adopted by ecommerce businesses to drive web traffic. 

The problem takes place when certain bad actors take unfair advantage of the shortcomings in the tracking and attribution model. They claim undue commissions, taking a bite out of the margins of many ecommerce businesses.

Estimates suggest that affiliate fraud costs $1.4 billion annually.

There are many methods for affiliate fraud that contribute to negative gross margins. 

Cookie stuffing is a popular method in which bad affiliates add cookies belonging to different advertisers to the shopper’s computer.

If the shopper visits any of those advertisers’ websites and completes a purchase, the affiliate will earn a commission, without actually taking part in leading the shopper to your website.

Left unchecked, affiliates will charge you for commissions for sales they claim to be driving to your website. So, a Black Friday discount of 20 percent will end up costing you 25-30 percent as you pay affiliates and reduce your margins. 

Ascertaining how suspicious-looking affiliates are cookie stuffing can be difficult. Rudimentary monitoring can be achieved using software but often needs to play catch up with new and emerging ways to take unfair credit for sales. 

Brandlock continuously monitors existing and emerging threats and stops bad actors from claiming unfair commissions. 

If you are interested in finding out how BrandLock protects ecommerce brands against unfair affiliate commissions, you can sign up for a free trial.

3. Add Behavior-based Personalized Promotions

Many online retailers are using the same traditional on-site messaging with one-size-fits-all promotions. This creates a lot of noise, so buyers occasionally pay attention. 

If blanket discounting is the only weapon in the brand’s arsenal, Black Friday and the holiday season will be a race to the bottom for online retailers. Such an approach negatively impacts the brand’s image and could be unsustainable.  

One way to infuse effective promotions on your website while ensuring adequate margins is to create personalized promotions. BCG reports that best-in-class retailers are investing 30%-70% more in retail personalization than the average retailer.

The way personalized promotions work is simple: Our plug-and-play technology understands shoppers’ intent to buy, cart data, recently viewed products, deal-seeking behavior, and much more that results in real-time one-to-one targeting. 

The best part of behavioral-based promotions is that they cannot be seen and copied by your competitors. It targets specific shoppers and their behavior on your website to deliver relevant deals and offers.

Personalized promotions can deliver 5X to 8X ROI on marketing spend, and can lift sales by 10 percent or more.

Personalized promotions not only keep your desired conversions and margin levels in check but minimizes online shopping cart abandonment too. We recently helped Pharmaca, a leading health and wellness brand, reduce online shopping abandonment cart rate and increase conversion rate by over 5 percent using behavior-based personalized promotions.

TL; DR

Right Offer + Right Place + Right Time = Personalized Promotions. 

Behaviour-based Personalized Promotions

4. Offer More Benefits (And Increase AOV)

You might think Black Friday ads are all about discounting. You are correct to an extent. Consumers are expecting attractive discounts during the Black Friday weekend, but that’s not all. Black Friday is a good time to offer more benefits and bonuses. 

With a few data points like AOV (Average Order Value), product margin, and cart contents, you can encourage shoppers to stretch the number of items in the cart to unlock benefits such as free shipping, free loyalty program membership, and more.

Ecommerce companies can use this tactic to get shoppers to trade for higher-margin goods. This can increase AOV during Black Friday without hurting your profit margins.  

Conclusion

kirklands using engage

With Black Friday around the corner, ecommerce businesses should actively look for a one-stop solution that can improve the customer experience, protect brand reputation while improving margins. So, you can focus on driving conversions and growing online revenue.

If you are interested in finding out how BrandLock protects ecommerce brands to improve their margins, sign up for a free trial.

Rajnil Thakur avatar image
Rajnil Thakur
Rajnil is a part of the marketing team at BrandLock. He’s been a B2B marketer for over 7 years and applies the power of content marketing to simplify complex technology and business ideas.