Case Study: How Shein used coupons to grow their online business

You get to the checkout page and there is a space to enter a Shein coupon code. ‘Oh,’ you think to yourself, ‘I didn’t know they had coupons.’ A quick Google search later and you’ve found a coupon code that will get you 30% off, but you need to up the total value of the items in your shopping cart to $100. No problem, there were some shoes that you had looked at earlier but decided to pass on. With the discount they’d be almost free! A week later you get an email thanking you for your recent purchase, and here’s a special coupon just for you for 15% off any full price item. Well, you don’t really need anything but it sure would be a shame to just let that coupon go to waste. And besides, they did make it just for you! So you find a nice dress, you don’t need it now but it’s cute and besides that you are getting a deal! And just like that, Shein has convinced you to spend more on their website than you ever intended to in the first place.

Shein discount codes

The Psychology of Coupons

So, how did Shein accomplish the feat of parting you from more of your hard-earned money? Quite simple, they used the psychology behind coupons. Even though consumer habits have changed drastically over the last few decades with the advent of the shopping mall and then online shopping, coupons have remained a constant. Why is that? Well, people love to feel like they are getting good value for their money even if it’s only a dollar or two off. That’s a dollar or two you can spend elsewhere! Studies have shown that using coupons actually increases levels of oxytocin in the brain, quite significantly actually. It makes you feel like you are making a smart choice, even though in reality you are usually purchasing something you would have gotten by just fine without.

A Brief History of Shein

Shein has seen a great deal of success in recent years, but where did they start? To be honest, the origins of the company are somewhat of a mystery. We know that it was founded in 2008, and that it has always focused on bringing everyone the joy of fashion. It does have it’s critics who say that it is fast fashion that relies on undepaid labour and poor quality fabrics to provide the products at such low prices. Most dresses will run you about $20 USD. These claims absolutely may be valid, but the scope of this article is how clever use of coupon codes has contributed to their success.

Another facet of their marketing strategy that has been incredibly successful is partnering with Instagram models and influencers who have big reach. But I’ll tell you a not-so-secret: coupons are part of this strategy as well. Their top influencers will be given unique coupon codes that are just for their followers, and they typically receive a percentage of sales made using those coupons. It’s coupons all the way down people!

Common Pitfalls of Offering Coupons

Now at this point you may be quite excited. You may be thinking you’ll just whip up a couple of coupons for Shopify store, send them along with sample product to some influencers and it’s off to the races. It’s not a terrible strategy, clearly, but there are couple of things to consider before you do this:

Is your product priced in a way that supports being able to offer a discount? If your profit margin is already very low (usually the case for many handmade items) then you may want to consider bumping up your prices before offering a discount.

If your campaign is successful and you receive a sudden influx of orders, can you realistically fulfill that? You do not want to end up with angry reviews from people who have not received their orders yet.

It may just not be right for your product/business. If you offer a high end product or service, then the high price point and exclusivity of the pricing is part of your branding. Coupons may appear to ‘cheapen’ it, and would alienate customers who are already buying from you. The psychology behind luxury brands is also fascinating, but a whole other concept than coupons. Coupons work for Shein, because their whole marketing strategy is focused around their (sometimes unbelievably) low prices.

Lessons from Shein to Apply to Your Business

Now you know the ins and outs of why coupons work, and how Shein has harnessed that power to work to their advantage. To sum up:

  • Have an attractive starting price point
  • Offer a coupon to increase perceived value
  • Offer follow up coupons for return customers to entice them to make another purchase