E-commerce businesses today employ innovative strategies to get the buyer to shop at their online store. There are varied marketing initiatives, consistent sales efforts and detailed customer support processes to convince the customer of the product’s worth.
However, more often than not, a user looks for value and affordability which eventually influences their buying decision. Price is an important element of affordability but reduced costs or frequent discounts is just one way of making any product reasonable.
Online businesses can significantly influence and enable affordability for their customers in more ways than one. While EMI’s, cashbacks and discounts are fairly popular, this article talks about unique ways which can be used to make a product more accessible to a customer from the perspective of payments.
Key Approaches That Introduce Affordability in E-commerce
1. Buyback guarantee
A buyback guarantee is when a business assures the customer of buying the purchased product back from them for a predetermined price and within a specified period. It is a powerful way to introduce affordability through assurance.
Businesses can expect to see a growth in customer retention considering the user is likely to come back to the store to buy a replacement after they have sold the product on the platform.
A buyback guarantee can help the user
- Feel confident about the product and purchase
- Ensure satisfactory returns on the product
- Get an opportunity to upgrade sooner
The online e-commerce marketplace, Flipkart provides its buyers with a buyback guarantee offer on smartphones. It promises to buy the phones at a pre-assured price and a guaranteed value between 6-12 months from the date of delivery of the original phone.
2. Money back policy
Money back guarantee is when the customer is issued a refund in case the product is damaged, faulty or unusable because of any reason.
It is a great promotional strategy that businesses use to build a buyer’s trust in the brand as well as offer convenience in shopping.
From the perspective of affordability, money back guarantee helps with the following
- Reduces risk for the buyer
- Makes users believe in the quality of the product
- Minimises apprehensions while investing in the product
E-commerce websites, especially those selling apparel have a money back policy on most garments encouraging buyers to purchase items more frequently and impulsively.
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3. Buy One Get One (BOGO)
A sales tactic with a strong focus on affordability, Buy One Get One appeals to most customers of the value proposition it creates.
From the viewpoint of a business, BOGO offers are useful in clearing inventory while ensuring higher traffic and better sales at their store.
Here’s how the offer persuades customers of better value
- Creates a sense of urgency and thereby exclusivity
- Convinces of sizable savings
- Builds a perception of getting more for less
Almost every online grocery store including BigBasket, Zepto and Blinkit often run BOGO offers on products across categories. It is highly suitable for edible products and items that have a short shelf life.
4. Coins
Coins are usually a part of reward programs and are issued/credited upon a purchase on the website or app. These points or coins can be in most cases encashed by the customer on their subsequent transaction.
Businesses expect to build customer loyalty by rewarding users who shop on their online store.
Here’s how reward points promote affordability
- Users are able to turn the points/coins into cash
- Customers feel incentivised with every transaction
- Buyers are assured of savings on their next purchase
The online shopping app Tata Neu rewards coins to their customers when transacting on the Tata Neu app, website, or at any brand stores and hotels. 1 NeuCoin is worth ₹1 and these can be redeemed by the users on their future purchases.
5. Lowest prices
E-commerce stores often introduce sale events that last for a very brief period and where the products are sold at extremely low prices. Users are also offered a free product when they shop worth a certain amount on the website.
For businesses, this increases the chances of better sales and higher cart values.
They make shopping affordable by
- Reducing the overall price of cart items
- Offering a worthy deal on every purchase
Flipkart Grocery offers a product for Rs. 1 on shopping goods worth Rs 800. Several other grocery stores have daily deals on essentials to attract sales.
Amazon Kindle also has limited-time deals on books where users can buy and download the online editions for free.
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6. Vouchers
Online vouchers are digital codes that can be availed by customers either for personal use or to gift others. Businesses that issue them also offer benefits along with the purchase of the voucher.
E-commerce stores introduce vouchers for increased brand visibility and to ensure customer retention.
Vouchers help ensure affordability because
- Users get additional benefits such as points/cashback on buying a voucher
- They act as discount codes on the next purchase
The Paytm App, for instance, lists gift cards by more than 200 brands across categories such as fashion, furniture, electronics etc. When users buy a gift voucher on the app they also get a chance to earn points as well as cashback in their Paytm Wallet.
Conclusion
With the evolving payments landscape, businesses need to redefine affordability for themselves and their customers. People do not perceive value only through the price cost but as a cumulative output of the cost, quality, convenience and service.
It is therefore important to analyse ways that offer users all of the above experiences and hence offer true value for money.
FAQs
Why should an e-commerce business offer affordability to its consumers?
For any consumer, the product price plays an important role in their buying decision. When e-commerce businesses offer affordability they are making it easier for the buyer to shop from their store.
Is affordability the same as product discounts?
Discount on a product is just one aspect of affordability. It can be extended through many other ways such as rewards and offers. Businesses can employ several inventive methods to offer affordability to their consumers.
Which affordability tools will work best for an e-commerce business?
Ideally they should be chosen after extensive research on your target audience and what can work best for them in terms of easing their buying decision. However, a business can also experiment with multiple models of affordability from time to time.
