Boosting e-commerce sales with promo codes: the guide

It's an essential tool for generating traffic, increasing sales and boosting growth: the promotional code. Also known as e-coupon, promotional code, discount code... This lever is a magnet for customers. It's even considered that 80% of consumers are more inclined to buy a new brand if they have access to a coupon or promo code (source: RetailMeNote annual report, 2021).

But is it really worth it for brands? Should they bank on this lever? And if so, how do you set up a coupon code on your e-commerce site? Find out all the answers from Rakuten, in this guide.

What is a promo code? Definition

Saving money is a priority for shoppers, especially in times of crisis or inflation. And to achieve this, customers rely on one tool: the promotional code (or promo code). This is an alphanumeric code communicated to potential customers, so that they can benefit from a discount when purchasing a product. The code is entered just before payment. A discount is then deducted from the customer's basket, and the final price of the products is reduced.

For customers, the coupon is an incentive to buy. For marketplace and e-commerce sellers, it's a sales driver. Today, 90% of consumers admit to actively using promotional codes. And its power is such that 46% of consumers abandon their online shopping baskets if a promotional code doesn't work.

To satisfy their customers, brands therefore have every interest in regularly proposing offers and promotions of this type... While ensuring the reliability of the codes proposed, to limit purchasing friction and basket abandonment.

 

The advantages of e-commerce promo codes

Have you launched your online sales site? Congratulations! Now you're looking to attract, convert and retain more customers? Here's a solution: deploy your promo code strategy. There are many advantages to these discounts, such as...

• Quick and easy to use: you don't need a 5-year degree in IT to create a promotional code for your e-commerce site. In just a few clicks, you can generate your promotional codes, and distribute them across your various channels (social networks, newsletter, website homepage, etc.).
• Greater visibility: promo codes are useful for promoting your brand, raising awareness of your products and developing your reputation. Especially in the competitive world of e-commerce. So think about specific coupon codes at different times of the year!
• More customers, more growth: discounts are a real acquisition lever. Ideal for attracting new buyers, seduced by a personalized, momentary offer. This type of marketing and sales action increases your market share, sales and company growth.
• Boost purchases: consumers are keen on bargains, promotions and discounts. By offering them a discount code, you can encourage them to complete their purchases, and even increase their average basket.
• Increased loyalty: a small promo code, for big long-term impact. That's the mission of this lever. By using them, you strengthen customer loyalty, which will keep them coming back to your e-commerce site. Especially if the experience is personalized!

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How do I set up promo codes?

Before setting up a promotional offer, it's important to choose the right form. There are many different types of promotional code. The best-known are :

• Single-use promo code: can only be used by a single customer, once, before a deadline set by the brand. This type of coupon code is frequently used to build loyalty among existing customers, in a personalized way.
• The multiple-use coupon code: this type of discount is valid for all Internet users, whether or not they are existing customers. Distributed omnichannel, it is mainly used to attract new buyers, to boost brand growth.
• Limited-time flash code: this type of code, open to all, is often used during a flash sale. It can be deployed only on certain products (to clear stock or, on the contrary, to facilitate a product launch) or on the entire catalog.
• Fixed discount codes: these differ from percentage discount codes. In practice, these codes offer the same discount on the final price... but they are presented differently to buyers. It's up to you to choose the most convincing marketing argument!
• The free delivery code: as we all know, free delivery is an essential selling point. According to a Sendcloud study (2023), the presence of shipping costs is even a reason for cart abandonment for 62% of e-buyers. For reasons of profitability, it's not always possible to offer free shipping all year round... So, have you thought about a momentary offer?

Promotional codes may take different forms, but their purpose remains the same: to create a sense of urgency and privilege among buyers, inviting them to buy. And in so doing, increase your online store's sales.

 

 

And if you're a Rakuten seller (or want to become one), creating a coupon is easy, so you can reap the rewards faster. We offer Rakuten Coupons, a type of discount coupon valid only on your ads. These personalized coupons give you instant visibility on our platform... and more customers, among our 13 million loyal buyers.

Find out more about Rakuten coupons

Promo code: FAQ

How to make money with coupon codes?

And above all, is it a profitable strategy? Unsurprisingly, it's an expensive investment. Offering a discount to a customer is never free. So, before setting up such an operation on your online store, you need to measure its rate of return.

Here's how to estimate the rate of return:

Profitability = (Income Generated by Coupons - Cost of Goods Sold - Total Cost of Transaction)

Let's take the example of an online store:

• Discount offered: €10 per coupon.
• Number of coupons distributed: 1,000.
• Estimated rate of coupon use: 10% (100 uses).
• Average production cost per item sold: €30.
• Average selling price per item: €60.
• Cost of distributing offers: €500 (e-mails, online advertising, social network posts, SEO, etc.).

Total cost of operation: Cost of coupons used + Cost of distribution =
(100 * 10 €) + 500 € = 1500 €.

1. Coupon revenue: (Average selling price - Discount per coupon) * Number of coupons used = (€60 - €10) * 100 = €5000.
2. Cost of goods sold (COGS): Average production cost * Number of coupons used = €30 * 100 = €3000.
3. Gross profit generated : Income generated by coupons - COGS = €5000 - €3000 = €2000.
4. Net impact on profit : Gross profit - Total cost of operation = €2000 - €1500 = €500.

 Cette opération de coupon génère ainsi un profit net de 500 €. 

This coupon operation generates a net profit of €500.

To simplify the calculation, you can also use this table. It allows you to measure the profit according to the number of coupon codes, if they offer a 10% discount:

Number of coupons distributed	Estimated utilization rate	coupons used	Discount per coupon € discount	Total cost of reductions €	Coupon income € generated	Net profit €
1000	10	100	10	1000	5000	500
2000	12	240	10	2400	12000	2400
3000	15	450	10	4500	22500	4500
4000	17	680	10	6800	34000	6800
5000	20	1000	10	10000	50000	10000

When should promotional codes be used?

Discounts can be implemented at different times of the year, depending on the seasonality of sales. But that's not all! Here are all the main times of year when brands can create and distribute promotional codes:

• Commercial events: New Year's Eve, Christmas, Black Friday, Valentine's Day, summer and winter sales, back-to-school... Take advantage of the main commercial holidays, as well as the discount periods that consumers find most attractive.
• Unsold stock: do you have products to sell off, for example at the end of the season? Deploying promotional offers is an ideal solution. Don't underestimate the power of coupon codes to help you sell off stock!
• Launching new products: a new range or collection? To make shopping easier, think of low prices... Accessible thanks to the use of a promo code.
• Off-peak periods: between sales and various commercial holidays... The aim of an e-commerce site is to maintain the interest of its audience. And to keep up sales, to aim for growth and maintain profitability. Now you know what strategy to adopt.
• Collaborations and partnerships: this is an increasingly popular way to expand your target audience and raise your profile. During an operation with another brand (or an influencer), the distribution of a promotional code is an excellent way of increasing sales... while offering a discount on the amount ordered.
• Cart abandonment: as you know, shoppers are increasingly inclined to abandon a purchase in the absence of a promo code. To combat cart abandonment, you can offer a surprise discount by e-mail, if an order is saved but not validated. The buyer will then be invited to return to your website to complete the purchase. Win-win!

To maintain your credibility, here's our advice: adapt your distribution rhythm to avoid overuse. The promotional strategy must remain occasional, to create an effect of scarcity and urgency to buy.

How do you communicate and distribute promotional codes?

It's not enough to create a coupon code to increase sales in an online store. It's even more important to share this information with prospects and existing customers! To achieve this, you need a promotion and communication strategy. Here are the different levers you can rely on:

• Emailing and newsletters
• Posts on social networks
• Partnerships with influencers (influencer marketing)
• Search engine optimization (SEO) and search engine advertising (SEA)
• Publication on bargain sites (such as Dealabs)

To create the right communication on these different channels, here's our advice: emphasize a number (the amount of the promotion or percentage discount) and the end date of the operation. This is because the human brain attaches more importance to information containing numbers, and motivation to buy is increased tenfold when a proposed advantage is temporary.

Discover Rakuten Coupons

Would you like to increase your sales, win over new buyers and retain your existing customers? At Rakuten, that's what we want you to do too. To turn this wish into reality, we offer the 12,000 product sellers on our marketplace a lever: Rakuten Coupons.

Ces codes de réduction sont personnalisés et valables sur vos annonces, pour vous permettre de gagner en visibilité sur notre marketplace.  En effet, les annonces qui bénéficient de Rakuten Coupons sont automatiquement placées aux emplacements stratégiques de Rakuten, sur les fiches produits et sur la page Rakuten Deals.

These discount codes are personalized and valid on your ads, to help you gain visibility on our marketplace. Ads that benefit from Rakuten Coupons are automatically placed in strategic Rakuten locations, on product pages and on the Rakuten Deals page. 

You're free to decide on the minimum purchase amount for the customer to benefit from a discount code. And you can control your budget, by defining a maximum amount not to be exceeded, which will mark the end of the campaign. At the same time, to help you spread the word about these promotional offers, our marketing teams take care of communicating the information via various acquisition channels, such as our newsletters.

So, are you ready to touch the hearts of your customers... with Rakuten Coupons? Create your own e-shop on our marketplace to sell your products, and launch your promotional strategy with us: