Back to E-commerce Dictionary

Discounts

E-commerce strategy1/5/2026Intermediate Level

Discounts are temporary price reductions offered to customers to incentivize purchases, clear inventory, or reward loyalty. They are a core e-commerce strategy for driving sales and managing product lifecycles.

What is Discounts? (Definition)

Discounts are price reductions that lower the cost of a product or service for a customer. Online stores use them to sell more items quickly or attract new shoppers. They also help clear out old stock or thank loyal customers. Common types include a percentage off, a fixed dollar amount, or deals like 'buy one, get one free'. To stay profitable, businesses must plan their sales carefully. Lowering prices too much can hurt profit margins or make a brand seem less valuable. Shop owners look at their costs and what competitors charge before starting a sale. They often target specific groups of customers with different offers. The size of the discount usually depends on the goal of the sale and how long the product has been on the market. Tools like WISEPIM help businesses manage these changing prices across all their sales channels at once.

Why Discounts is Important for E-commerce

Discounts are price reductions that e-commerce stores use to attract customers and increase sales. They help turn browsing visitors into buyers by making products feel like a better deal. Many stores use discounts to lower cart abandonment rates. For example, a store might offer a small discount if a customer completes their purchase. You can also use discounts to increase the average order value by requiring a minimum spend. These price cuts help find new customers through introductory offers. They also keep existing customers coming back through loyalty programs. Discounts are also useful for managing inventory. They help clear out seasonal items or old stock quickly. This makes room in the warehouse for new products and frees up cash for the business.

Examples of Discounts

  • 1A store offers 20% off all items for Black Friday. The system applies this discount automatically at checkout.
  • 2A shop runs a 'buy one, get one 50% off' deal on t-shirts. This promotion helps move stock quickly.
  • 3Email subscribers get a code for €20 off any order over €100. This encourages customers to spend more.
  • 4A webshop offers free shipping on orders over €50. This reduces the total cost and works like a price discount.
  • 5New customers receive a 15% discount code when they join a newsletter. This incentive helps drive first-time sales.

How WISEPIM Helps

  • WISEPIM stores all your discount data in one place. You can manage pricing tiers and promotional details from a single dashboard. This keeps your information accurate and consistent across every store and marketplace.
  • WISEPIM automatically syncs discount details across your webshop and marketplaces. This prevents pricing mistakes that could confuse customers. When prices match everywhere, shoppers trust your brand more.
  • You can quickly update product photos and descriptions specifically for sales events. Adding marketing text tailored to a discount helps your items stand out. This makes your promotions more effective and helps you sell more.
  • Automate how you add or remove discount information from your products. WISEPIM uses workflows to start and end sales at the right time. This ensures your promotional prices only appear when your campaign is active.

Common Mistakes with Discounts

  • Offering big discounts too often hurts your profits. It also makes customers think your products are worth less than their full price.
  • Running sales without a clear goal makes your marketing less effective. You should know if you want to clear old stock or get people to spend more per order.
  • Giving the same discount to everyone misses the chance to target specific groups. Personalized deals usually work better than a single offer for every shopper.
  • Many businesses forget to count extra costs like shipping and payment fees. If you ignore these expenses, your discount might actually lose you money.
  • If you offer sales at random times, customers will stop buying at full price. They will simply wait for the next discount before they check out.

Tips for Discounts

  • Set a clear goal for every discount. Decide if you want to clear old stock or encourage customers to buy again.
  • Group your customers by their shopping habits. Offer specific deals to loyal buyers or people who only shop during sales.
  • Test different types of offers to see what performs best. Compare a fixed dollar amount against a percentage to find the most profit.
  • Show the value of the product rather than just the lower price. Use phrases like "Get more for less" to make the offer feel like a reward.
  • List the rules clearly to avoid confusing your customers. Include the expiration date and any items that do not qualify for the discount.

Trends Surrounding Discounts

  • AI-driven dynamic pricing: Utilizing AI algorithms to optimize discount levels and timing in real-time based on demand, inventory, competitor pricing, and customer behavior.
  • Hyper-personalization of offers: Leveraging advanced data analytics to deliver highly specific and relevant discounts to individual customers or micro-segments.
  • Gamification of discounts: Integrating interactive elements like spin-the-wheel, scratch cards, or quizzes to make discount discovery engaging and rewarding.
  • Subscription-based and loyalty program exclusive discounts: Offering unique pricing or early access to sales as a perk for loyalty members or subscribers to foster retention.
  • Sustainability-linked discounts: Providing incentives for customers to choose eco-friendly products or sustainable shipping options, aligning with corporate social responsibility.

Tools for Discounts

  • WISEPIM: Centralizes product data, including pricing tiers, promotional attributes, and discount eligibility, ensuring consistent application across all sales channels.
  • Shopify: E-commerce platform offering robust features for creating various discount codes, automatic discounts, and gift cards, integrated with checkout processes.
  • Magento (Adobe Commerce): Provides advanced pricing rules, catalog price rules, and customer group-specific discounts, enabling complex and targeted promotional strategies.
  • Akeneo: PIM system that manages product information, including attributes relevant to pricing and promotions, which can then be syndicated to e-commerce platforms for discount application.
  • Salesforce Commerce Cloud: Offers comprehensive promotion and coupon management capabilities, supporting personalized offers, A/B testing, and rule-based discounting.

Related Terms

Also Known As

PromotionsPrice reductionSales offersRebates