Zalando Coupon Strategy Case Study

Did you ever ponder how Zalando manages its coupon campaigns? Have you ever wondered about the logistics behind launching and maintaining such a massive promotion over dozens of channels? In any case, stop being curious and read on.

It’s safe to say that the value of paper coupons has increased significantly since their introduction in 1887. Over 90% of Americans now say they use coupons at least once weekly when shopping. Zalando is one of the largest European e-commerce companies and has figured out how to make coupons work. To learn more about their coupon offerings and what makes them tick, we looked into over a hundred of their campaigns from the past few months.

1. Learn your customer base inside and out

A successful campaign relies on a coupon that is well-suited to the needs of its target audience. How can you guarantee that the coupons your marketing team creates are a suitable fit for your target demographic? There is no one-size-fits-all solution; you must consistently readjust to meet their needs. And the only way to do it is by meticulously tracking client activity and analysis.

The company does this in several ways: by comparing and contrasting different coupon versions. You may be wondering, “How does that function?” They run many campaigns, each with a slightly different set of parameters, at the same time and then analyze the data. Coupon characteristics like discount value, minimum spend, expiration date, etc., can be tested across various demographics, including geographical locations, marketing channels, gender, and age.

The process begins with a limited rollout to a subset of customers so that they can determine which variant is most likely to result in sales. The advertising is then rolled out across the country or the entire channel.

This method allows them to determine which products are the most popular and which price cuts would generate the highest return. Next, Zalando incorporates the findings from the survey into future campaigns to better meet the requirements of their clientele.

Coupon tests are a safe technique to gauge whether or not a product would appeal to consumers. As a result, Zalando can strike a better balance between campaign profits and expenditures with this tool.

2. Should Use Fixed OR Randomly Codes?

Another problem that must be dealt with at the outset of coupon plan development is the kind of campaign being run. What makes this fact so crucial? Because it affects the methods above of client monitoring. Zalando’s campaigns all have unique, hard-to-guess codes, which isn’t a fluke.

If you want to raise exposure for your business or get the attention of numerous potential clients, a fixed code campaign is the way to go. In the meantime, having individual codes helps monitor how well a promotion is doing with its target audience. Furthermore, with a one-of-a-kind code, you can cut down on fraudulent use of discount codes and provide further information about the buyer. A wealth of vital marketing information can be gleaned from them.

Finally, with the help of their coupon software, Zalando can track all campaigns across all channels and put extra effort into those that are most successful in terms of redemptions.

3. Influence of Regional Markets

To successfully enter new areas, Zalando understands that widespread distribution is essential. They can distribute their coupons to many potential clients with the help of local channels. Zalando uses influential advertising agencies to carry out this plan.

There is, of course, more to it than that. Other examples of local advertising include:

• Attaching fixed-code coupons to ads on mainstream websites and printed media
• Joint deals with other brands, e.g., buy a washing machine to get a gift card code
• Social channels – Zalando uses its country-specific social media to promote different coupons for different audiences

You probably already know that the variety of local marketing options is enormous. Zalando may use this to its advantage to get more people to check out the site and, hopefully, make a purchase. The ability to monitor coupon popularity and redemption rate on a per-store basis is crucial. With this kind of monitoring equipment in place, they can:

• use a mixture of short- and long-running A/B tests,
• figure out what’s best for the local segments,
• attribute ROI to a particular channel.

Adding all this up, they can ultimately outperform the competition.

4. Modifying your discounts and incentives

Zalando’s marketing staff knows that attracting customers’ attention with a coupon is only half the battle. First, people on the fence must be persuaded, and those undecided must be convinced. How? Putting a deadline on a discount code is a popular tactic used to encourage clients to make a purchase. Making them feel like time is of the essence will make them more determined to use your coupon, which will help you save money by cutting down on coupon abandonment.

Adding cart-based restrictions is another method to increase the code’s replay value. For example, take the hypothetical case of a coupon that may only be used if the final price is above a certain threshold, such as the predicted average order value. Perhaps you find this to be an attractive incentive for upselling. And you’re right; Zalando heavily utilizes it.

They come up with different prices for various campaigns, locales, or groups, so they aren’t neglecting experimentation and personalized marketing. Checking, double-checking, and rechecking.

Another method Zalando discovered to improve order value via coupons was product-based upselling. One strategy is to point out complementary products to the shopper as they peruse the aisles. But, of course, Zalando is capable of even more. Coupon campaigns, such as 10% off women’s shoes or $20 off Nike Air Max, are issued under the stipulation that the shopping cart must contain products from those categories or events.

Incorporating these two upselling strategies into a single promotional offering would open up a world of opportunities.

5. Round-the-clock coupon marketing

The Zalando coupon strategy is active all year. They’ve built a significant fan base by constantly releasing new short-term, diverse, and targeted ads, sending people to their websites in search of discounts on the sneakers of their dreams.

Zalando can prepare a year’s worth of tailored discounts and other incentives in advance, thanks to their couponing system’s scalability. Black Friday and the holiday season are just the beginning; you can also mark national holidays, sporting events, and even local festivals like Oktoberfest on the calendar.

Additionally, they can team up with any local or global brands to create countless more win-win deals throughout the year if they ever run out of ideas. Specifically, they can target the employees of their joint venture partners with a coupon campaign.

6. Controlling the Coupon Inventory

Zalando faces the challenge of preventing the fraudulent use of its discount codes when they are disseminated via several sources. Their discount program handles this for them, yet again. How? With these three components:

• Fixed-use promo codes, such as Christmas2016, have a maximum redemption restriction of 20,000 attempts before they expire and become invalid.
• Each customer may use the code a single time.
• It is impossible to combine multiple discount codes on a single purchase (however, as you will see in the subsequent piece, gift cards can be used in conjunction with discount codes).

Zalando can accurately predict the total number of redemptions because of this strategic approach. In addition, there is no need for the company to worry that the widespread distribution of public coupons will increase the likelihood of coupon fraud, which might cost the company a lot of money.

Zalando also manages its various coupon campaigns. There is still a requirement for monitoring even though there is less potential for abuse with unique codes. Keeping the number of campaigns’ codes manageable is of utmost importance. Reasons for doing so include exerting authority over partners. Zalando’s monthly commission payment makes this information crucial.

Zalando is much ahead of the curve when it comes to marketing strategies. However, their investment in dependable and auditable coupon software makes this possible.

Let’s review the methods they employ:

• A/B testing and tracking of a promotional coupon effort.
• Campaigns utilizing both static and dynamic codes.
• Investigating the effects of varying the discount, expiration, redemption limit, purchase total, and coupon percentage value.
• A coupon upsells imposes a minimum purchase and offers discounts only on select items.
• Planning out a year’s worth of discount campaigns within a specific time frame.
• Affiliate marketing with local businesses and online couponing sites.
• Advertising to specific subsets of consumers (employees of the company, students, etc.).
• And judging by the look of their scale, we can be sure that it is automated because otherwise, they would suffer significant losses due to coupon fraud.

However, they are not finished yet. In this article, we’ve just scratched the surface of marketing strategies.

Visit any Zalando website, and you’ll see this:

Here’s something we haven’t covered yet: the new coupon strategies that businesses can implement when they acquire your email address. Together, these methods make it possible to improve coupon marketing in terms of targeting, tracking, and conversion.