Why limited-time offers bring long-term benefits to retailers
Limited-time products are all the rage, and stores including H-E-B, Trader Joe's and Dollar General have used them to attract customers and provide them with a unique experience, according to Store Brands.
By creating a sense of urgency, retailers are getting consumers — including many new ones — into stores, where they'll often purchase other products.
- In a study done by WhichTestWon, products sold online with an availability timer converted sales at a 9% higher rate than those without it, reported Shopify.
Limited-time products can be great for retail business because they steer new customers to stores, bring existing customers back more often and let companies test new products. Unfortunately, the output comes with a risk. If products run too long, customers can feel cheated. If the product is completely different than the merchandise the company normally sells, it may confuse customers. If the brand or retailer sticks to a strategic plan, however, the limited edition can increase sales in the long term.
In March, Texas-based grocer H-E-B developed a special edition tote bag that featured images of the late Mexican-American singer Selena Quintanilla. In stores, these sold out in 15 minutes, but are selling on eBay for as much as $110. Earlier this month, Food Lion released a limited release beer in select stores within its home state of North Carolina. In May, Dollar General partnered with many national brands to include exclusive limited edition items in its stores.
Limited-time product releases work well for large retailers because they can quickly gain traction and sell a large quantity of products to their already established customer base. Large companies have more marketing power than smaller retailers — the key to a successful limited-time product.
Good limited-time products can also increase sales by driving customers into specific stores, where they may pick up a few other items along the way. Trader Joe’s limited edition fireworks chocolate bar, a spicy chocolate candy, was sold at the checkout lines as an impulse buy for consumers. Even though it is no longer sold, it's still sought after.
These products help create a specific identity for retailers, which can make them a long-term destination. These limited products are highly coveted by millennials, who are attracted to products that make them feel special. Like pop-up shops, these give customers a unique experience, the feeling of community and a one-of-a-kind experience from a trusted brand.
- Store Brands Creating the Covetable
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