E-commerce Discount Strategies To Boost Sales Without Compromising On Profits

Enhance your e-commerce conversion rate with discounts. E-commerce websites offer lucrative discounts to their customers to increase sales. It is given on multiple occasions, for a first-time buyer, during a clearance sale, or a festive season sale.

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Discount pricing is beneficial to a certain extent, but brands risk losing their money due to excessive discounts. Also, providing the wrong type of discounts attracts deal seekers only.

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It results in the failure of potential customer building based on brand recognition.This article focuses on using discount pricing to reduce revenue losses while increasing sales closure.

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What Is The Discount Pricing Strategy In Retail e-commerce?

Discount pricing means offering products and services at a lower value than their MRP or listed value. It can be a temporary or permanent discount based on product type and event.Discounts can be flat amount off, percentage-based discounts, free delivery, buy one get one (BOGO), etc.

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What Are The Different Scenarios To Offer Discounts?

1. To motivate first-time buyers in making a purchase

‍There's a cost incurred while acquiring new store visitors and converting them to customers. The discounts provided to first-time users are part of the customer acquisition cost. Offering discounts entice customers to make their first purchase on your site and avoid cart abandonment.

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‍2. To clear your old inventory

‍In an e-commerce business achieving inventory turnover is crucial. It represents the total number of times your inventory is sold and replaced by a new one. Offering discounts on old products is a great way to clear inventory occupying your shelf space.

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‍3. Improve festive season sales

‍Discounts can give you a higher competitive advantage during a festive season or prime day sales. It creates a ripple effect affecting all the retailers positively.

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Coupons help users in checkouts and avoid abandoning their carts. It even helps in after-season sales by offering follow-up discounts after checkout, dated after the end of the sale.

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Top 5 Discount Pricing Strategies (With examples)

1. First purchase discount

‍Getting visitors to your website is challenging but turning them into customers is even harder. A discount coupon can be shared with a new visitor on your website via pop-up or during the checkout.

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Offering discounts will reduce your cart abandonment rate and motivate customers to make their first purchase. On the Fynd Platform, you can achieve this by using the Screensaver extension and notifying store visitors about the discounts. Similarly, you can also create coupons that offer new user discounts.

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2. Buy One Get One (BOGO) deals

‍If you want to create FOMO among your customers, there's no better deal to offer than a BOGO deal. E-commerce sellers can use BOGO deals creatively by offering freebies. Customers can be rewarded and incentivized by combining these deals.

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Fynd Platform enables you to create banners and sell products in bundles. It helps in selling more and increasing the average bag value. Offering Buy X Get Y is one of the proven ways to clear old inventory and obtain optimum inventory turnover.

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3. Tiered discount pricing strategy

‍Often you might have heard how buying in bulk attracts higher discounts. Similarly, you can offer your customers a ladder-based discount. It will be progressive and will increase in proportion to the number of products purchased.

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Fynd Platform offers the Modern Price Ladder extension that enables users to set the price of products based on the number of products added to the cart. Ladder-based discount pricing is of two types;

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1. Fixed discount: The higher the number of products in the cart, the lower the selling price. For example, if one chocolate bar costs ₹50, buying five bars costs ₹40, and buying ten bars costs ₹30.

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2. Percentage discount: The discount percentage will increase based on the number of products added to the cart. For example, if one chocolate bar costs ₹100, you can get two at a 10% discount (90 each) and four at a 20% discount (80 each).

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‍4. Discount with a timer!

‍Another way to create FOMO among store visitors or potential customers is to limit the time of the product discount or use of a coupon. Running a flash sale is beneficial when you want to clear your inventory at a faster pace. When customers are on the fence about buying a product, a flash sale entices them to make a quick decision.

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It is also a great strategy to reduce cart abandonment. A flash sale becomes a lightning deal when given an extra boost! Lightning deals are very short-term sales in which the users must purchase within a specific time frame to receive the discount.

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‍5. Personalised discounts

‍There's nothing better than a personalised discount specially curated for you. When a user visits your website, you can display a pop-up. Customers can enter their contact details in exchange for a discount coupon. Offering discounts in return for their personal information is a great way to build your contact list and share newsletters, discounts, early deals, and more.

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Fynd Platform offers a Newsletter extension that allows you to schedule attractive pop-ups. When a customer shares their email via the subscription pop-up, you can save the subscriber data in a CSV file format. You can use this data to share discount offers.

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Top 3 Things To Consider While Designing Your Discount Strategy

1. Costs involved in the product

‍When it comes to selling online, certain costs involved are - manufacturing, packaging, and shipping. A cost that's missed consideration by many retailers is the marketing and promotions cost involved in acquiring a customer.

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As per Boston Consulting Group, 20% to 30% of retailers miss considering the promotion cost involved while calculating the product price. According to the same survey, 20% to 50% of marketing programmes fail to deliver results yet are not discontinued.

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Retailers fail to interpret what's working for them and what isn't. Fynd Platform offers Google Analytics (GA4) extension that shows detailed website traffic. You can make better marketing decisions by understanding the website data.

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2. Timing of enabling discounts

‍Demand for products is not high all year round as it does for packaged drinking water. Some products have variable peaks and valleys throughout the year, while others are seasonal. Retailers should study the market trend and previous sales data to understand when there's a demand for their product.

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When it comes to closing sales using a discount pricing strategy, timing is of utmost importance. If the timing is right and the demand is high, discounts can result in faster sales closures.

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3. The type of product you're selling

‍If you're planning to build a luxury brand, offering high discounts will result in product devaluation. Even if the product quality is good, customers will wait for a discount to make their next purchase. Similarly, for product resellers, giving out significant discounts will help them stay competitive.

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Manage Discount Pricing Strategies With Fynd Platform

Fynd Platform offers multiple features to enable discounts on your e-commerce website. Tracking is crucial to avoid throwing darts in the dark. You can find that golden combination that results in high closures.

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Experiment with multiple discount strategies and analyse their results. With a full suite of e-commerce features, Fynd Platform can help you turn your ideas into reality.

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Get in touch with our team at support@fyndplatform.com to know more.