Do You BOGO? Buy One Get One Can Jump-Start Business
If you like free stuff, you’re not alone. A study done a few years ago shows that 93% of shoppers’ favorite deals are BOGO – Buy One Get One – sales promotions. The same research showed that 66% of shoppers preferred BOGOs to other promotions. So, any businesses looking to jump-start sales don’t need to look any further than the most popular acronym in retail: BOGO.
The study, done by AMG Strategic Advisors, got responses like: “I like free stuff;” and “Seems like I’m getting more” when it asked respondents about why they liked BOGOs. Admit it. How many times have you bought into a BOGO?
They’re a staple of grocery store marketing, offering two-for-one deals on items most shoppers really didn’t need when they walked in the door. Those items are often soft drinks, chips, cookies and crackers, tortillas and other such “necessities?”
Cell phone service providers also use BOGOs extensively. They often bundle last year’s phones or cheaper models to entice subscribers to sign long-term service contracts.
The study also showed that the psychology of the sale inferring that shoppers get something “free” is more effective than offering a 50% discount which essentially is the same thing. While 9.6% of shoppers like the Half-Off offers, it doesn’t approach the two-thirds who prefer BOGOs.
What BOGOs Do
Creating foot traffic in a store is the most obvious benefit of a BOGO sale. Shoppers will flock to a store to pick up their “free” items even if they don’t need them. The perception that they are getting something for nothing is enough to drive shoppers to action. If a business’s margins are properly adjusted, profit can still be made even though it is figuratively “giving away” merchandise.
Clearing inventoryis another benefit of BOGOs or other discounts. A BOGO or other similar discount sale allows retailers to get rid of less desirable inventory in order to make room for new, more desirable or seasonal items. BOGOs are a great tool to move seasonal items when their season is ending, like selling snow shovels in the spring or patio furniture, pool toys and bathing suits in the fall.
Creating loyal customers is a key objective of any retail business and a Buy One Get One sale is a good way to do it. The psychology of the sale is that a business is giving away free merchandise and BOGOs advertised through incentive program outreach can enhance customer loyalty.
How to Make BOGOs (or Any Sales) Work
There are many approaches to creating effective sales promotions.
Targeting a specific group is included with nearly all of them. Once you decide on which products you want to clear out, aim your marketing outreach squarely at it. Buy One Get One sales on wild bird seed, for instance, can be aimed directly at loyalty program customers who’ve bought related items in the past. Then, those purchases can be used to upsell new and different kinds of feeders, birdhouses and more.
Bizfluent offers some valuable advice for hardware store owners. Segmenting customers into three categories – contractors, serious do-it-yourselfers and casual home repair types – allows store owners to target their sales merchandise and messages.
- Contractors obviously don’t need much help when it comes to choosing products, but they can be prodded to purchase products offered through bulk buy incentives.
- DIYers might be inspired to undertake a project simply because a product such as paint or stain in on sale. These customers are often eager for knowledge and instruction. Serious DIYers often purchase higher quality tools that contractors might use with the thought of future projects in mind.
- Casual customers who are homeowners often need the most care and advice. They are more likely to depend on the advice of experts and are likely to reward solid service with loyalty purchases.
Supplying information is another way to make a sale work. If a business is looking to move inventory of paint and stain, garden supplies or lawn care products, it can work with suppliers to see if they can provide any merchandise displays, co-op advertising, or in-store demonstrations to jump-start the sale.
Expert advice can help prompt sales, especially for big-ticket items. Most hardware and lumber and building materials stores can leverage the expertise of their staff to provide that information. Garden center specialists who are particularly knowledgeable about what works in their growing regions are invaluable resources to customers.
Create urgency. As with any sale, setting a deadline prompts action for consumers. As with any sale, setting a deadline prompts action for consumers. “While Supply Lasts” indicates there’s no telling how long the BOGO or any sale will run.
Businesses with intuitive retail platforms make the mechanics of recording BOGO and other sales transactions a breeze. They also set up pricing plans and calculate sales merchandise return refund amounts.
Here are some other ways to generate some buzz in your store.
Find reasons to celebrate. Sales are typically centered around holidays – Presidents Day, Memorial Day, Labor Day, and, of course, the big one, the Christmas holiday shopping season. But there are plenty of other days and ways to celebrate.
Just to name a few, how about:
- National Popcorn Day (Jan. 19)
- National Bird Feeding Month (February)
- National Rotisserie Chicken Day (June 2)
- National Grilling Month (July)
- National Dollar Day (August 8)
- National Savings Day (October 12)
You can also associate sale items with significant birthdays.
- Elvis Presley (Jan. 8) – guitars and pop culture memorabilia
- George Forman (Jan. 10) – electric grills
- Babe Ruth (Feb. 6) – baseball equipment
- Thomas Edison (Feb. 11) – light bulbs, phonographs, cameras
- Alexander Graham Bell (March 3) – home and cell phones
- John Wayne (May 26) – cowboys stuff – boots, hats, tack, guns
- Henry Ford (July 30) – anything automotive
It’s not that hard to find something to celebrate and sell.
Create an event. It doesn’t take Jeff Bezos or Jack Ma to create a shopping event.
Prime Day 2018 resulted in more than 100 million products being sold and total sales jumping more than 60% from the previous year. Amazon doesn’t release sales figures, but industry analysts estimate the online retail giant scored more than $3.6 billion in sales.
Likewise, Alibaba’s Singles Day, the largest e-commerce shopping day in the world which is Nov. 11 each year, racked up $30.8 billion in sales over the 24-hour period last year.
Individual stores or smaller multi-store chains can create their own shopping buzz with a little effort and a lot of marketing. If you’re going to throw a sales party, you must let people know.
So, whether you want to move some overstocked merchandise or create your own annual shopping event, BOGOs or similar sales are a great way to jump-start your business when foot traffic stagnates.