Retailers: Online Giveaways and Constant Discounts Can Dilute Your Brand

The hot topic of the month amongst online fashion marketers revolves around the value of online giveaways and contests. We have been discussing whether or not product giveaways still hold the same value that they had a year, or even a year and a half, ago.The Consensus: They don’t hold the same value and yes, giving away products – as well as constant promotions and sales - dilute a brand’s value. Moreover, they hurt online consumers’ perceptions of that brand.Now, I know I have to back that statement up. Why? Because I myself have given products away. When it comes to free swag, I only believe that brands or retailers should give away merchandise only when it brings far more value than the cost of the marketer’s time and the goods given.The Problem With Online GiveawaysAs soon as a brand or retailers enters (or their agency enters them) into the social media arena, the first thing we usually see are “25%, 30% or 50% off your purchase!” messages being Tweeted and added to Facebook fan pages.This is wrong. Why would a brand or retailer start with “SALE” or “DISCOUNT”? The primary focus of your social media strategies should be to find your customers who are already online and build dialogues with them, as they are most likely to become your evangelists.When the Twitter and Facebook sales codes fail to resonate with community members, we usually see brands and retails do product giveaways. “Enter To Win A Free Pair Of !” becomes the message, always complete with exclamation marks!This strategy is also wrong. It’s downright promotional and sounds fake. I can tell when an agency is behind a giveaway a mile away when I glance over a brand’s Facebook or Twitter page; the “!” is their favorite character to use.Don’t get me wrong – people love free stuff. But so many brands and retailers are giving free stuff away that online audiences and community members have become resistant to it. They don’t want their favorite blog or bloggers promoting free product that they wouldn’t mind getting, but have to jump through hurdles to get.Moreover, potential customers don’t want to put forth the effort for products that have nothing to do with the blog or community they’re a part of. If a website focuses handbag, why would it want to give away shoes? Sure, shoes go with bags, but that audience wants bags – and they probably want expensive ones.The point is this, online consumers are smart.Giveaways and contests have to be well thought-out. Brands need to build relationships with bloggers, communities and forums they’re a part of. They also have to do their homework as to where their current customers are and where the customers they hope to attract are.Online contests and product giveaways can be successful, but they have to fit into other online marketing initiatives, and they have to offer something that online consumers actually want. A great example is what Zappos.com has done with Stuart Weitzman shoes on several occasions.Also, brands and retailers should develop other strategies in which they can give away their product and reap far greater benefits. La Perla recently did a fantastic online advertising/email sign-up campaign on sites such as Fashionista.com and FashionIndie.com.A Successful Giveaway

At the beginning of the year, I partnered with Style Epiphany (formerly Boutique Flair) to give away a set of bracelets that were not available online or in-store for another four months.Entrants had to sign up for our mailing list, leave a comment on a blog post as to what their favorite item on 1928.com was and then write a blog entry regarding that item. Finally, they had to Tweet it, add it to Facebook or Stumble it.Results: 357 comments, 156 Tweets and 78 Facebook/Stumble Upon additions. There were also another 168 comments on another entry regarding 1928 Jewelry collections.For a giveaway that asked contest participants to go beyond just leaving a comment in order to have a chance at winning, this contact had extremely high engagement.Recently, Krista Peck (founder of Style Epiphany), said that her website hasn’t had a contest with such high level of engagement since. In the ten days the contest ran, we generated not only new email subscribers and increased site traffic, but we also gained an extra $7600 in revenue above the cost of implementing the program.Why was this contest successful and why did the community members go to the lengths they did in order to win two bracelets?The answer is very simple, I did my homework.Based on retail locations that sold 1928 products and the demographics of the average customer who purchased the products online, I created online customer profiles. I chose a website that fit those customer profiles (in this case, Style Epiphany), had consistent editorial content and an active community that trusted the site’s editors.I also chose a site in which the community members had some knowledge of the brand’s product lines and probably only needed to be reintroduced to it as opposed to completely educated to the product lines.Because of this, as well as a few other factors too lengthy to discuss, it was an extremely successful contest that achieved multiple goals and also yielded revenue.Food For ThoughtDuring the WWD CEO Summit, Karen Katz, president and CEO of Neiman Marcus Stores, stated “We’ve got to get back to selling price. We’ve got to stop the markdown cycle and wean customers off the deal of the day. We can’t get back to the way it was. It was craziness.”“It’s an absolute goal. We’ve got to get off that promotional cadence,” added Bonnie Brooks, president and CEO of Canadian department store chain The Bay.This holds true of all retailers, accessories and apparel brands and designers. The constant cycle of discounts, sales and the message of “FREE” dilute brands and are causing damage that some brands may not be able to recover from.To discover more Fashion Marketing articles, visit FashionablyMarketing.Me.