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Managing Promotions in Shopify: Price Discounts

Growth Spark

This is the 1st post in our 5-part blog series exploring the huge returns you can see by using successful e-commerce promotions. The series will cover:

  • Price Discounts
  • Buy One Get One (BOGO)
  • Free Shipping
  • Bundling
  • Bulk Pricing

  • We’ll walk you through how to strategically plan each type of promotions, and show you how to execute them in Shopify. Follow them all to get valuable tips for growing your business!

    Discounts are everywhere. Every online store seems to be announcing “15% off!” or sending emails with “Spend $100, Save $10” offers. So how are you supposed to run a profitable business if the law of the land is discount, discount, discount?

    Well first of all, you don’t have to run sales all the time. If your brand is positioned as luxury or higher-end, you’re probably better off not holding frequent sales.  For example, the Tiffany & Co.  homepage doesn’t show a whisper of a sale anywhere.

    But if your pricing strategy gives you healthy enough margins and your direct competitors run regular price discounts, then it’s important to consider your sale strategy.

    Why? Because discounts have been proven to help drive new customer acquisition and increased loyalty, and are an opportunity to increase your profits and/or reduce excess inventory.

    Price Discount Strategies

    Before you launch into offering discounts willy-nilly, it’s important to consider your goals.

    1. Gain New Customers: If you’re trying to acquire new customers and grow your brand, a discount for a first purchase can help drive that result - like this one from iHerb.

    Similarly, discounts for referring a friend or providing a social like/follow/share can introduce your brand to more new customers.

    Although you might take a ‘hit’ on short-term profitability by discounting products to new customers, the real value is in the long-term customer relationship and the opportunity to upsell them in the future.

    1. Increase Revenues to Meet Goals: Many online retailers use sales at the end of a month or quarter to increase revenues and meet projections or goals.

    1. Reclaim Abandoned Cart Sales: Three-quarters of online sales are abandoned in the shopping cart. That presents huge potential to gain back some of those lost purchases by offering customers a discount for following through on their purchase.

    1. Stay Competitive During the Holiday Shopping Season: Shoppers have come to expect lower prices and great deals during the Black Friday/Cyber Monday/Christmas shopping season.

    While these are some of the most common strategies for using price discounts, the key is to consider what will work best for your brand and goals.

    What Does a Discount Event Look Like?

    Price discounts are simply a change in price. But there is a bit more to planning a sale than just lowering the price. You’ll want to consider:

    • Product(s): What items will you discount? Will it be site-wide or on last season’s remaining inventory? Is there a specific collection that you want to discount, like all shoes or sunglasses?

    • Discount Type: There are two primary types of discounts: percentage and dollar value.

      • Percentage: This discount is most popular. Small incentives may be 5 to 10 percent off, while larger discounts like 20 to 25 percent can really drive sales. Large percentages such as 50 percent or more are usually used to liquidate products that aren’t moving or are old.

      • Dollar Value: These discounts will often be paired with a minimum purchase (Spend $150, Get $30 Off). It can encourage people to spend more to reach the minimum purchase amount.

  • Scheduling: What date and time will the sale begin? And end?

  • Application: Where will the discount be applied: at the product level, in the cart, or to the shipping cost?

    • Limits: Will this be a limited promotion only available to the first XXX customers that take advantage of it? Will it be limited to one-time use for each customer?

    Once you know what you want to achieve from running a price discount, and have planned the details of your sale, you need to know how to make it happen in your Shopify store.

    Creating a Price Discount in Shopify

    There are two simple ways to create a price discount with your existing Shopify tools. Which one you use is based on how long you intend to apply the discount.

    Permanent Markdowns

    For long-term price changes (or in situations where there is no reason to show the price change to the customer), you can enter the discounted price using the Shopify manual price edit field.

    Here’s how to permanently discount a price from your Shopify admin site:

    1. Click the “Products” tab in the left menu
    2. Click the name of an existing product
    3. Scroll down to “Variants”
    4. Click in the price box
    5. Edit the price to the new, discounted price
    6. Click save at the bottom of the page

    That’s it. The price has now been permanently changed, and your customers will not see any reference to the previously higher price.

    >> TIP: Need to permanently discount the price for multiple products? Shopify’s bulk editing feature makes quick work of those changes. Just go back to your product page, and click on all the products you want to edit. You can then edit each product’s price individually -- all within a single page.

    Temporary Discounts

    For short term sales or price reductions that allow the customer to see a price difference, the “Compare at Price” field is what you need.

    Here’s how it’s done:

    1. Click “Products” from your admin page
    2. Click the name of the product you want to discount
    3. In the Variant area, click “Edit” at the far right
    4. In the “Pricing” area, enter the old, higher price into the “Compare at Price” field. Enter the new, discounted price into the “Price” field. (The “Compare at Price” must be higher than the value of the “Price” to display a sale price.)
    5. Click Save

    The way a “Compare at Price” displays in your online store will vary based on the theme you’re using. Customers may see a “Sale” label on the product image, or they may see the old price crossed out alongside the new price. The way sale prices are shown also depends on whether your product has variants and if they are listed at different prices.

    Discount Codes

    You can also offer customers reduced prices at checkout by generating a coupon code, although this won’t affect the displayed prices of your products.

    To create a discount code from your admin page:

    1. Click on “Discounts”
    2. Select “Create Discount”
    3. Create a discount code name
    4. Set the discount type (percentage, fixed amount or free shipping) and amount
    5. Identify which products or collections the code applies to
    6. Set customer eligibility and any usage limits
    7. Define the start and end date/time for the discount code
    8. Click “Save”

    These three basic methods will help you manage small-scale product discounts. But what should you do when you’re planning a BIG EVENT? A flash sale or product launch or major marketing push?

    We’ve got one more discounting trick up our sleeve for Shopify Plus members...

    Launchpad: Automated Price Discounts for Major Sales Events

    It can be nerve-wrecking to launch a big, sitewide sales event. It takes a ton of planning, coordination, and tracking to make it happen and ensure it’s all worth the end results.

    You need all the help you can get.

    Launchpad is available to Shopify Plus clients. It lets you easily automate promotions and temporarily schedule price changes so you don’t have to do it all manually. Huge time saver.

    The app makes it easy to :

    • Apply product discounts
    • Release new products
    • Add inventory
    • Use a temporary theme for the event
    • Lock your store before the event to build hype and anticipation
    • Enable captcha challenges at checkout to prevent bots from placing orders
    • Instantly roll back changes after the sale is over
    • View real-time analytics to assess success

    Are you getting excited about running a discount event or sale now that you have the strategy and tools to make it easy and successful?

    One of the biggest secrets to successful discount promotions is to test. Test. Test. And then test again. Try different discount amounts and approaches, times of year, durations, collections and other variations -- and exploring the analytics each time. You can use Shopify’s Advanced Reporting Features to customize your default reports by adding filters, dimensions, and metrics. This process will help you refine your understanding of your customer base and learn how to make the most of their purchase preferences.

    Questions? Interested in working with us? Let's chat!


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