Discount Pricing Strategy: 16 Examples & Tips [2024]

Your discount pricing strategy can be one of the most important drivers of great performance for your business.

That's why online businesses rely on discounts so much—in fact, 70% of Shopify stores use discounts to build a customer base and nurture them.

Let's see how to use discounts strategically to grow your business without cutting into profits. That means building a discount pricing strategy.

Get started:

• What is discount pricing?

• The most common discount size

• Tips for discount pricing strategy

• Examples of discount pricing strategies

What is discount pricing?

Discount pricing is a strategic use of different discount types to support business growth through campaigns for boosting sales, acquiring new customers, clearing out inventory, or increasing customer lifetime value.

The word "strategic" is key for effective price discounting in ecommerce and retail, as the business needs to be aware of potential reputation damages and profit losses that may occur if discounts are applied randomly or too heavily.

What is the most common discount size in ecommerce?

The most common discount size Shopify stores use to convert new customers is 10%, followed by 20%.

This was the result of our study of 500 mid-sized and large Shopify stores. This discount size is one of the lowest in history, as many businesses are trying to protect their profit margins during the ongoing recession.

Tips for your discount pricing strategy

• Learn to sell product value first. Discounts are essentially a form of selling your prices, so giving them shifts the focus from the value to the cost. To be able to use discounts regularly, you have to excel at conveying the unique value of your products

• Personalize your discounts with visitor targeting. You can set up website popups to appear only to specific visitor groups or based on their browsing history, which is a great way to personalize the discounts and make them contextual

• Don't be predictable with your sales. While offering discounts can boost sales, using them too frequently or predictably can create a culture of waiting for discounts among your customers. Instead, use unexpected discount offers to maintain the full price perception

• Use free gifts carefully and infrequently. To avoid degrading your product or reputation, consider limiting offers involving free gifts only to very special occasions, product samples, and for the most loyal customers

• Protect your top items by choosing other incentives. Giving discounts on the most expensive items is a sure-fire way to lose the ability to sell them at a higher price later. Go for different ways to add value, like free extended warranty or extra loyalty points

• A/B test your discount offers. Experiment with discount sizes and combine them with other incentives to produce better results

Discount pricing strategies

The top-performing discounts strategies for ecommerce stores include:

• First-order discount

• BOGO (Buy one get one free)

• Pre-order discount

• Abandoned cart discount

• Flash sale discount

• Easter weekend discount

• Product bundling discount

• Free product giveaway promo

• Customer reactivation discount

• Customer loyalty discount

• Discount based on the number of orders

• Subscription discount

• Mystery discount

• Referral program discount

• Black Friday pre-sale discount

• Cyber Monday last chance discount

First-order discount

As mentioned, 70% of Shopify stores give discounts to motivate new visitors to make a purchase, making them the most common (and probably the most effective) way to build a customer base.

Blume, a self-care brand, uses this website popup to give 20% off to first-time buyers. This offer converts 5% of visitors on their website:

Best practice:

Note that Blume also promises extra perks like free returns and free shipping on order over $50 in their welcome popup. Mentioning them gives customers more reasons to buy, which makes the offer look more appealing.

How to use the first-order discount pricing strategy, you need to:

• create a website popup (using popup software)

• write an engaging welcome message for customers

• add the discount or coupon (say, 10% for the first order)

• choose to show the campaign to new visitors only (here's how to do that with targeting)

If you'd like to try this strategy, let me suggest Wisepops—this popup builder is rated 4.9 on Shopify and has a 14-day trial with all premium features.

Follow these steps to make a discount popup and grab a free account to start:

Free trial with premium features, no cc needed. Learn more about Wisepops popup builder and how you can use it for BFCM

BOGO (Buy one get one free)

Online businesses use BOGO ("Buy-one-get-one-free") discount strategy for special occasions and clear out slow-moving inventory. Typically, the complimentary item is replenishable (like, shampoo or lip balm) or something that complements a more expensive product.

Other types of BOGO deals include:

• Buy one, get one half-price

• Buy one, get a free sample

• Buy one, get a free product from another category

• Buy one, get X% off the second item

Again, Blume uses this discount pricing strategy on special occasions. In this example, they highlighted this offer as part of a brand anniversary celebration:

Pre-order discount

A pre-order discount strategy means that you offer a special, reduced price to customers if they buy them before the launch day. This strategy is popular in ecommerce, especially by DNVB brands that adopt the pre-order business model.

Although pre-order discounts limit future promotion possibilities, they reduce overproduction and provide quick profits, helping support marketing and other needs.

Asphalte is a fashion brand that makes only the pre-ordered number of items, so it gives discounts for buying earlier:

Abandoned cart discount (Oddballs)

Extra costs are the main reason why 48% of shopping carts are abandoned in ecommerce, so discounts can be an effective strategy to recover them.

For example, Oddballs offers a 10% coupon to customers who abandoned the cart with this exit intent popup below. Note two things: a unique coupon code and an easy one-click application of the discount to the cart:

Flash sale discount

Flash sales are limited-time offers (typically between eight and 48 hours) with significant discounts. The most important goal of this discount pricing strategy is to move excess inventory and motivate customers to explore the store.

Charlotte Bio sells affordable cosmetics (the most expensive item costs about $20), so they do use flash sales only once in a while. In this campaign below, they gave 40% off all products for six hours (note that customers could apply the discount here in one click, too):

Since Charlotte Bio's store gets a lot of mobile shoppers, they also made a mobile-optimized campaign to improve their experience (and follow Google's guidelines for mobile popups).

The campaign had the same design and one-click code application:

This flash sale discount strategy produced great results:

• 5,000+ visitors saw the announcement campaigns

• 1,000+ visitors applied the discount to the cart

• 17% of the monthly sales were made within six hours

Learn more about this discount marketing project: read Charlotte Bio case study

Easter discount

Easter is a great occasion to have a special offer, especially given that your customers will be waiting to see if you have one.

Soi Paris, a fashion store, offered a 15% sitewide discount during the Easter weekend. But they implemented this discount strategy in a very creative way—

Egg hunt.

Visitors were instructed to find "eggs" (egg-shaped popups) with discounts on product pages with this announcement on the homepage:

The "eggs" looked like this:

When visitors found an egg, they got the discount (which was applied to the cart automatically) as well as a reminder to use it during the weekend.

Here's this creative discount strategy in action:

If you'd like to try this discount strategy on your ecommerce website, you can get more details by checking out the Soi Paris case study.

Also, we recreated this campaign so you can try it out on your own:

Product bundling discount

Product bundling is a discount strategy that combines a few items into a single unit sold at one price. This approach can boost ecommerce sales by increasing the average order size.

Here are examples of product bundling to consider:

• Pure bundling. The items are chosen by you only

• New product bundling. A bundle includes new arrivals

• Mix & match bundling. Customers can choose the items in the bundle

• Excess inventory bundling. Includes slow-moving or seasonal inventory items

• Cross-sell bundling. Combines products from different categories that complement each other

CODAGE Paris promotes their seasonal product with this campaign below. The only requirement is the order value, so customers can choose the items themselves:

Free product giveaway promo

This is an effective strategy for retail businesses, and a great way to combine onsite (on website) and offsite (in a brick-and-mortar store) marketing. The idea is simple: to give a free product (or a discount that needs to be applied to get the free item) in the store that can only be used online.

But 4Murs, a furniture retailer, added some creativity to the offer.

They showed banners in brick-and-mortar stores, promoting a giveaway of two pieces of a popular piece of furniture. The banners had a QR code that, when scanned, directed users to the 4Murs website with a popup signup form for the giveaway:

The campaign generated 88 emails in a short period of time—over 80% of those who scanned the code entered the giveaway:

Customer reactivation discount

The goal of this discount strategy is to re-engage customers who have not visited your website or opened your emails in a few months or longer. A special discount can motivate them to return and make a purchase.

Ecommerce stores typically send customer reactivation discounts in emails. Here's an example of this strategy from Candle Delirium:

To make customer reactivation discounts work:

• Offer discounts on items that customers bought before

• Limit the validity of the offer to 24 hours to create a sense of urgency

• Include a few product images or categories in the email to encourage exploration

See more examples: 7 re-engagement email examples to get repeat purchases

Loyalty discount

This discount pricing strategy focuses on increasing the customer lifetime value. The goal is to offer a special discount to those who have just joined your loyalty program. It's a nice way to greet a new member and encourage them to explore and buy your products.

OddBalls welcomes new loyalty program members with 20% off their next order:

Oddballs uses discounts to convert both new and registered customers. One discount pricing strategy they had for new visitors resulted in $50,000 in revenues.

Read OddBalls case study

Discount based on the number of orders

Consider this discount strategy if you'd like to make some special offers to high-spenders or VIP clients. By giving a special discount to those who made, say, ten orders, you can make them feel valued and encourage future purchases.

Only Natural Pet, for example, gives 20% to VIP customers with a special Friends & Family event in this email:

Discount strategy tip for ecommerce:

Use ecommerce and Shopify targeting options in popup software to show exclusive discounts only to high spenders.

For example, this is how you set up a campaign for registered visitors who made 10 purchases from you before (customer.orders_content > Is greater than > 10):

Learn more: Shopify targeting options

Subscription discount

This discounting pricing strategy is effective for subscription businesses. By giving a good deal on multiple orders along with an extra incentive, you can boost email list building and sales.

Stumptown Coffee Roasters, for example, gives 15% off the first three deliveries as well as free shipping on all subscriptions. Offering free shipping for several three orders with a lower price will significantly reduce hesitation among potential customers:

Tip: Consider giving discounts for subscriptions on special occasions to make them more special.

For example, a coffee seller might use National Coffee Day (September 29 in the US and Canada), National Espresso Day (November 23rd), and Peppermint Latte Day (December 3rd). There are at least 25 coffee holidays in the US alone, so you'll never run out of ideas.

Mystery discount

This is a discount pricing strategy that ecommerce stores use around holidays and some special occasions to make more interesting offers. Also, this is a creative way to engage both new and passive customers.

Example: Olive My Heart gives a limited-time mystery offer to first-time visitors on multiple popular items:

If you'd like to try a bit more creative approach, consider this idea from Fashion Nova, one of the top Shopify stores.

They made a popup that you have to "scratch" to reveal you discount. And it's not only about the design too: it appeared on the checkout, which was a bit of a surprise:

This price discounting strategy can also work well for special occasions like customer birthdays and anniversaries.

Tip: If you're using popups to share mystery offers, make sure they're personalized by using page targeting. For example, make a campaign that gives a discount for watches and shows only to visitors who viewed products in the "watches" category.

Learn more: how to do page targeting

Referral program discount

This is a must-have discount pricing strategy for ecommerce stores. Almost 60% of customers trust product recommendations from friends and family, so giving a discount for a recommendation makes perfect sense.

DB Journey, for example, gives 15% off for the referral.

Creating a referral program is something you can do quickly thanks to apps (many are free). Grab one of these referral apps for Shopify and get started.

Black Friday pre-sale discount

Many ecommerce businesses use this discount pricing strategy to accelerate email list building before Black Friday and generate more interest in the sale event. The idea is simple: give a special, early-bird discount for buying on Black Friday. The only requirement: signing up.

Art of Play shared this offer like this (note they also required first names):

Note:

To ensure that your discounts appear (and disappear) on specific days and even hours on autopilot, use time scheduling options to do so in a few clicks.

Cyber Monday last chance discount

This is another popular discount strategy in ecommerce retail. The idea is to give a special, limited-time discount to registered customers who did not have the chance to buy on Black Friday.

DB Journey, for example, promoted a similar offer with this campaign below. Note that they added a countdown timer to create a sense of urgency, too:

A bit more about this discount pricing strategy from one of its creators:

Discount pricing strategies: summary

Implementing discount pricing strategies can significantly boost sales, enhance customer loyalty, and improve overall brand engagement. Beyond the immediate goal of boosting sales, these strategies can also foster a deeper connection with your customers.