Discount pricing: strategies and examples

What is a discount pricing strategy?

A discount pricing strategy is one where you will introduce various offers and/or sales within your online store. The main characteristic is that the discounts do not have to be long-term, so you can take advantage of them at key moments to solve any of the following issues:

• Excess stock in the warehouse
• To increase traffic to your store
• To boost the sale of products you need to shift from your catalogue
• To focus attention on new product launches
• To reward loyalty and boost users’ repeat purchases

A discount pricing strategy is not a strategy that always involves low prices, also known as Everyday Low Prices. The aim is to apply promotions and discounts in a targeted way to obtain a specific result by selling certain products.

One of the key aspects to successfully implementing a discount pricing strategy is having the right promotion optimisation tools. These tools will find the optimal discount for your products at any given moment. This discount will guarantee your target sales volume and the profit that your business needs.

Discount pricing examples that you can apply in your e-commerce business

Discount pricing strategies tend to go alongside other long-term promotions. They are combined with one another to offer additional benefits for purchasing certain point products.

Amazon uses this strategy. The internet behemoth has an outstanding strategy: discounts for subscribing to products. This tactic successfully gets users hooked on automated repeat purchases of products that they will need to buy again in the future. At the same time, Amazon rewards them with a percentage discount.

On the other hand, Alibaba applies a promotion for bulk buying. The Chinese giant gives discounts of between 20% and 60% on products which are cheap to ship for the seller. The user’s costs reduce significantly, while the seller gains popularity, accessibility, and good reviews, without saying goodbye to their profits. 

Finally, Ikea. ‘New lower price’ and ‘IKEA Family Member discounts’ are their customers’ two most sought-after claims. Both refer to different ways of using discount pricing. The former involves wide-ranging price discounts on items each season, which could be to realign production or due to high product demand. The latter rewards repeat customers’ loyalty. As members of a shopping club, they receive lower prices on certain products depending on the season. Recently Ikea introduced a campaign which discounted a different product category from one month to the next. Therefore, their customers can benefit from this kind of offers throughout the year. 

As you can see, the biggest brands already use discount pricing strategies to sell more and better. Good price and promotion optimisation software is essential to introduce these strategies efficiently and precisely. Have you requested your Reactev demo yet?