Gift with purchase (GWP) is a sales tactic that entices and converts shoppers. GWP lets shoppers buy one or more products and receive one or more free products.
If you think back to eating cereal as a kid, the prizes you got with them, or the toy your kids might get with their McDonalds Happy Meal, those are examples of GWP.
Unlike other promotions, GWP doesn’t take away from the value of the primary product, like offering a discount or providing free shipping. The GWP is used to add value to the shopper which encourages customers to buy by providing more for the same price.
Some shopper benefits include:
- Cost savings – Customers to receive more for the same price.
- Experience – GWP allows shoppers to experience products they ordinarily might not have tried. This is very common in the makeup and beauty sectors.
Some merchant benefits include:
- Increase customer engagement & repeat purchases – by offering a GWP complementary to the product being purchased (e.g. socks with shoes) it adds more value to the customer, engages them and promotes repeat purchases. In the socks with shoes example, the consumer might fall in love with the socks and purchase more.
- Increase conversions – the perceived value by a shopper by offering a GWF, potentially for a limited time, will generally result in an increase in conversions.
- Increase average order value & up/cross-selling – when qualification for a GWP is targeted at a minimum order value, the average order value can increase. In scenarios where a shopper doesn’t meet the minimum threshold, it can encourage them to purchase more.
There is also a really interested industry research paper dating back to 2004 but still a good read. It discusses whether GWP promotes or discounts a brand: https://www.researchgate.net/publication/228465262_Free_Gift_with_Purchase_Promoting_or_Discounting_the_Brand
Here is a detailed walkthrough of how the feature works in the Sitecore Experience Commerce 10 (XC10) release: