Offering discounts during Diwali is a proven way to attract more customers and boost sales, but it can also erode your profit margins if not done carefully. Striking a balance between providing attractive discounts and maintaining profitability is key to a successful festive season for your business.
Here are strategies to offer Diwali discounts without hurting profits:
1. Offer Value-Based Discounts Instead of Sitewide Discounts
A blanket discount on everything may seem like a crowd-puller, but it can lead to unnecessary loss. Instead, offer value-based discounts on selected items that are popular during Diwali or have higher margins.
How to implement it:
- Focus discounts on high-margin products such as gift hampers, home decor, or festive clothing.
- Use loss leaders—discounting a few popular items to drive traffic while encouraging customers to buy other full-price products.
- Offer discounts on Diwali bundles or combinations of products, which help increase the average order value (AOV).
Example: Offer 10% off on Diwali gift sets, but keep premium products like electronics or high-end apparel at full price.
2. Introduce Tiered Discounts
Tiered discounting is a great way to encourage customers to spend more while keeping profits in check. The more they spend, the bigger the discount they receive, but these discounts are only applied to high-value purchases.
How to implement it:
- Set up spend thresholds for discounts, such as “Get 10% off when you spend ₹5,000, and 20% off when you spend ₹10,000.”
- This encourages customers to buy more to unlock greater discounts, while your store benefits from higher sales volumes.
Example: “Get 15% off on purchases above ₹7,000 and 25% off on purchases above ₹12,000.”
3. Use Time-Limited Flash Sales
A time-limited Diwali sale creates urgency and excitement while controlling the duration of discounts. This helps prevent profit loss by encouraging immediate purchases rather than letting discounts linger.
How to implement it:
- Offer flash sales that last only a few hours or a day on certain product categories.
- Use email marketing or social media to alert customers of the upcoming flash sales and keep them engaged.
Example: “Diwali Flash Sale: 20% off on festive home decor for 24 hours only!”
4. Provide Discounts for Bulk Purchases
Offer discounts on bulk purchases to increase your overall order size without slashing prices on individual items. Bulk discounts can work particularly well for corporate gifts, Diwali hampers, or household items bought in multiples.
How to implement it:
- Create bulk buy offers, such as “Buy 2, Get 1 Free” or “10% off when you buy 5 or more items.”
- This helps move more inventory and increases the average order value without deeply cutting into profits.
Example: “Buy 3 Diwali candles, get the 4th one free.”
5. Introduce Discounted Gift Cards
Instead of directly discounting products, offer discounted gift cards for customers to redeem later. Gift cards guarantee future revenue while encouraging repeat purchases, and they also offer more control over your discounting strategy.
How to implement it:
- Run a promotion like “Buy a ₹2,000 gift card for ₹1,800” to offer perceived value without cutting into profit margins upfront.
- Gift card redemptions often lead to overspending, which can further increase the profitability of your Diwali sales.
Example: “Diwali Special: Buy a ₹3,000 gift card for only ₹2,700.”
6. Focus on Free Shipping Over Deep Discounts
Many customers are drawn to free shipping as it directly reduces their checkout costs without affecting the pricing of your products. Offering free shipping for Diwali can help attract customers without damaging your overall profit margins.
How to implement it:
- Set a minimum order value to unlock free shipping, which encourages higher spending while minimizing the cost to you.
- If offering free shipping is costly, you can include it only on selected items or within certain regions.
Example: “Free shipping on all orders above ₹5,000 this Diwali!”
7. Use Early Bird Discounts
Reward customers who shop early for Diwali with exclusive early bird discounts. This allows you to spread out your sales volume over a longer period and reduce the need for heavier discounting closer to Diwali.
How to implement it:
- Offer a small percentage discount for customers who purchase before a specific date, such as 5-10% for early purchases.
- Promote early bird offers through email marketing, social media ads, and your website to create awareness and urgency.
Example: “Shop early and get 10% off your Diwali shopping when you buy before October 31st.”
8. Bundle Slow-Moving Stock with Popular Items
Bundling slow-moving items with high-demand Diwali products is a smart way to clear inventory while protecting profits. Customers perceive more value when items are packaged together, even if some of the products are less popular.
How to implement it:
- Create festive bundles that combine high-demand products with slow-moving or overstocked items.
- Set the bundle price so that it’s attractive to customers while still maintaining a healthy margin.
Example: “Get a free Diwali diya set with every purchase of festive lights.”
9. Run Loyalty Programs with Exclusive Discounts
Loyal customers are often more willing to buy during festive seasons if they are given special offers. Instead of offering blanket discounts, create exclusive discounts for your loyalty program members, keeping the broader discounts more conservative.
How to implement it:
- Offer exclusive Diwali discounts to loyalty program members as part of your rewards system, encouraging repeat business.
- Set up a points-based system where customers earn points on purchases and can redeem them for discounts.
Example: “Loyalty members get 15% off on all Diwali purchases—sign up today!”
10. Focus on Up-Selling and Cross-Selling
Instead of relying on deep discounts, boost your profits through up-selling (suggesting higher-value products) and cross-selling (suggesting complementary products). These strategies encourage customers to buy more without the need for discounts.
How to implement it:
- When a customer adds a product to their cart, suggest higher-priced alternatives or complementary products they might like.
- Use personalized recommendations to offer related products based on their browsing or purchasing history.
Example: “Add these Diwali-themed cushion covers to match your new festive home decor set.”
11. Offer Discounts for Social Sharing
Encourage your customers to promote your Diwali offers by giving them a small discount in exchange for sharing your store or products on social media. This expands your brand’s visibility at a minimal cost and can increase sales without relying on large discounts.
How to implement it:
- Provide a small discount (e.g., 5%) for customers who share your Diwali sale on their social media profiles.
- Set up a referral system where customers can earn discounts for referring friends to your store.
Example: “Get 5% off your Diwali purchase when you share our Diwali Sale on Instagram!”
12. Limit Discounts to New Customers
Attract new customers with introductory Diwali offers while keeping your existing customer base paying full price. This way, you balance acquiring new customers while maintaining margins from your regular buyers.
How to implement it:
- Offer new customer-only discounts, such as “Get 15% off on your first Diwali purchase.”
- Set up email marketing campaigns or paid ads to promote your new customer offers to attract a fresh audience.
Example: “First-time shopper? Enjoy 15% off your Diwali purchase—limited-time offer!”
Conclusion
Offering Diwali discounts doesn’t have to hurt your profits. By using strategies like tiered discounts, value-based offers, bundling, and focusing on high-margin products, you can attract customers while maintaining a healthy profit margin. Planning your discounts carefully will allow you to maximize sales during the festive season without sacrificing long-term profitability.