5 Types of Discount pricing strategies that work

in dynamic pricing, discount pricing strategies, price optimization

When e-tailers are looking into their product marketing strategies, they often opt for discount pricing strategies. Especially at times when they are launching new products, getting rid of the old ones or boosting sales.

Discount pricing strategies have been present in retail sectors for a long time. There are many different opinions on how to benefit from these strategies. Some marketers praise them and some advise not to use them in your sales or marketing plans.

The most common concern when it comes to discounting, is finding a way that works, rather than hurts business results by cutting profit margins.

Here at FutureMargin, we believe that a smart discount pricing strategy is an essential tool in your product marketing and, that it can have a powerful impact on your revenue and profit.

We like to say that it's all about finding the right balance while working with elasticity of demand in mind. When demand is low, a well-handled discount strategy can boost your sales. When demand is high, you should avoid discounts and keep a stable pricing strategy.

The key to success is in choosing the best discounting approach for your e-shop and implementing it efficiently into your day-to-day business. For doing that, we prepared 5 examples of discount pricing strategies that work in retail.

Choose a discount pricing strategy for your e-shop

1. Customer Value Discounts

Segmenting customers into groups is an essential tool for businesses and their product marketing. Diverse customers value products differently and it is crucial that you recognize this. Analyze their shopping habits and get specific with defining the way in which they value your offer. Knowing the right price point per segment lies in understanding the true product value. Based on that, divide your customers into different segments and offer value based discounts. Give special perks like a 15%-off coupon for first-time customers so you get them interested. Build advocates and a regular base of your clients. Make your loyal customers feel exceptional by offering specific discounts. Avoid customers who visit your website purely because they are hunting for discounts.

2. Product Life cycle Discounts

The second very important discount pricing strategy is based on a products'
life cycle. How long has the product been on the market? Is it a new product that needs to gain market awareness? Or is it a product that is in decline and you want to get rid of old stock? Identify when and how you want to place discounting into practice for different life cycles of your product offer.

3. Seasonal Discounts

Analyze conversions from your website and you will find out that there are days, weeks or months when some products do better or worse than the others. For lower performing ones, be aware of not slipping into the trap of everyday discounts. Customers may think that your products are of a lower quality. What works better is specifying an event, seasonal prices or coupons. Discount when it’s Christmas, Easter or the well-known Black Friday or Cyber Monday. Customers will be pleased by your discounted offer and won't assume that you're getting rid of low performers.

4. Bundle Discounts

Explaining bundle discounts in a simple way is by saying that you can offer several products for sale as one combined product. Customers appreciate a percentage discount or 'get one free' when they buy a set number of items.This strategy is more suitable for high volume and high margin products.

5. Offer Free Shipping

Free shipping is not exactly a discount price strategy but it helps to get the attention of your customers. You can certainly boost sale conversions by using this technique, especially for your domestic offers. Be aware of not cutting into your profits. A good idea is to offer free shipping with a minimum order amount.


Choose the best discount pricing strategy for your e-shop. Understand the impact discounting has on your customers. Look at how they value your offer, a products' life-cycle or seasonal events that influence purchasing decisions. Finally, boost your sales by using bundle discounts or extra pricing strategies like free shipping.

About FutureMargin.com

FutureMargin is a conversion analytics software that measures and guides your systematic product pricing and increases your e-commerce profits. FutureMargin can be integrated with Shopify stores through a Shopify app, or with any e-commerce store through our API.