Marketing Under the Microscope #3
Content and infographic developed by the IT - Content Team
As we reach the end of the 2019-2020 financial year, we see end of financial year (EOFY) sales advertisements popping up left and right. But what exactly are the EOFY sales and how are they connected to marketing?
EOFY for businesses
The government is encouraging spending especially for EOFY with an instant asset tax write off of $150,000, up from $30, 000 for businesses with a turnover of under $500 million, up from $50 million. This poses the question of whether businesses should spend on advertising to generate profit, increase spending to take advantage of decreased taxes, or not spend extra at all to help the business afloat during this crisis!
Just another promotional tool
Taxpayers see EOFYS as an excuse to buy more, and a tool for tax deductions. During EOFYS, taxpayers attempt to increase expenses to claim certain purchases made before June 30 to reduce the amount of taxable income and thus the tax required to be paid. Businesses take advantage of this, bringing in sales and deals to attract customers and stimulate consumer spending, leading to higher profits despite lowered margins. They see it as a way to gain a better financial position, which is especially vital during COVID.
EOFY Promotions in COVID?
Despite the allure of tax benefits, there are some companies that should consider not participating in EOFY promotions to boost sales during COVID.
-Restaurants and cafes - Social distancing measures pose restrictions on how many people can be in a restaurant at a time, so promotions can only increase sales to a limited extent. The best way these businesses can boost sales is through promoting takeaway services!
-Products infamously low in stock - Products such as our favourite, constantly sold-out toilet paper doesn't require sales for their shelves to clear in minutes (we've all seen the videos of fights at Woollies!).
-Tourism-Restrictions on travel mean that promotion of tourism packages in the near future can only boost sales to a limited extent. This may change in the next financial year as travel restrictions are lifted and people look forward to jetting off after months in quarantine!
On the other hand, some businesses benefit from EOFY promotions
-Tech businesses-EOFY promotions act as a financial incentive to purchase more high-ticket items, not only because your overall savings are greater, but you obtain more significant tax reductions for that financial year.
How to advertise during COVID
However, we see that some businesses still participate in EOFY sales promotions in today's environment.
SMS has come up with some quick tips on how to promote your EOFY sales during COVID!
-Move online - Online promotion and sales
-Personalisation of promotional offerings - tailoring advertisement and deals to the needs and wants of users
-Demonstrations in ads and online-people value the EXPERIENCE of a product especially now when all we are all confined to our homes
-Make ads COVID related! It helps to acknowledge the situation we're in and to demonstrate how your product or service can help make consumers feel just a bit better.