Your e-commerce glossary

All the terms you need to know to succeed in modern e-commerce, explained simply and clearly.

Back to Glossary

What is Discounts?

Discounts are promotional offers that reduce product prices to encourage purchases, helping Shopify stores boost sales, attract customers, and increase order value.

Explanation

A discount in the context of e-commerce refers to a reduction in the price of a product or service, often applied through coupon codes, automatic discounts, or special offers like sales events. Discounts can be applied based on specific criteria such as product category, customer segment, or order value. These incentives are often used by merchants to boost sales during special promotions or to move excess inventory.

Importance

  • Increase Sales: Discounts are proven to encourage customers to purchase more or buy sooner than they would have without the incentive.
  • Customer Acquisition: Offering discounts can attract new customers, especially when used strategically for first-time buyers.
  • Clearance of Stock: Merchants can use discounts to clear out seasonal or slow-moving products.
  • Enhanced Customer Loyalty: Regular discounts for returning customers can improve loyalty and retention, leading to repeat business.
  • Competitive Edge: Discounts can help your store stand out in a competitive market, making your offers more attractive compared to other stores.

How It Works

  • Choose Discount Type: Discounts can be percentage-based (e.g., 10% off), fixed amount (e.g., $5 off), or based on specific conditions like "Buy One, Get One" offers.
  • Set Discount Conditions: Merchants can set conditions such as product-specific discounts, minimum purchase requirements, or discounts for new customers.
  • Apply Discount at Checkout: Discounts can be applied manually via a promo code entered by the customer or automatically through predefined conditions in the Shopify system.
  • Track Impact: Merchants can monitor the success of discount campaigns through Shopify’s analytics tools to assess how discounts affect sales and customer behavior.

Benefits

  • Boosted Sales: Discounts are an effective way to increase conversion rates and motivate customers to complete purchases.
  • Enhanced Marketing: Discounts can be used as part of larger marketing campaigns to attract attention and create urgency (e.g., flash sales).
  • Customer Loyalty: Offering regular discounts can help retain existing customers and build a loyal base.
  • Inventory Management: Discounts can help reduce stock of older or slow-moving products, making room for new inventory.
  • Competitive Pricing: Strategic discounts can help businesses offer more competitive prices in a crowded market.

Top Shopify Apps for Managing Discounts:

Abandoned Cart Recovery
BOLD Discounts ‑ Flash Sales

- Allows merchants to create discounts for specific products, collections, or the entire store.

- Provides options for creating automatic or code-based discounts, offering flexibility in promotions.

- Supports volume and tiered discounts to encourage larger orders.

Abandoned Cart Recovery
Unlimited Bundles & Discounts

- Lets merchants offer product bundles at discounted prices, improving sales through value-based offers.

- Helps create volume-based discounts and automatic promotions for bulk purchases.

Abandoned Cart Recovery
Pumper Bundles Volume Discount

- Enables merchants to offer quantity breaks, so customers get a discount for purchasing in bulk.

- Provides tools to create product bundles and discounts for increased cart size.