Smart Discounting in Ecommerce: Why It Matters
Did you know that in 2026, U.S. ecommerce revenue is expected to reach over $1.5B? With numbers like that, plus a healthy entrepreneurial spirit, online business owners and startups can’t wait to make their mark and capture success. But the ecommerce landscape gets more competitive by the day. So, what’s the magic formula to scale retail growth at a manageable pace? It could come down to smart discounting.
2025 Consumer behavior and buying trends
Inflation has taken a toll on consumer confidence and customer expectations. With the cost of goods continuing to rise, it’s natural to think people would curb their spending. A Numerator 2025 Consumer Trends Visions Report indicates otherwise.
Consumers aren’t expected to curtail spending, but instead seek creative ways to buy the products they prefer at easy-to-swallow prices. With tariffs coming into the fold, only time will tell how high prices will go and when consumers decide enough is enough. However, there are qualities today’s online shoppers have grown comfortable with to keep their purchasing power on point.
Value-driven
No matter where customers prefer to shop, online, instore, or a mix between the two, they believe quality of goods isn’t something to sacrifice—and it’s part of what draws them to one brand compared to a competitor.
Brand power in 2025 is hinged on pricing too, and ecommerce retailers can expect discounts to engage more sales. But to consumers, value means more than a good deal; customers want to feel they’re getting an exclusive or personalized offer at the same time, giving more value to their purchase choice.
Brand loyalty
Building a community of brand loyalists can lead to more purchases and grow customer referrals, simply by word of mouth, sharing positive shopping experiences, and fostering a following. Last year’s top 100 fastest-growing brands increased their buy rates over 7.6 points, thanks to returning customers. With brand loyalty, more customers jump on your bandwagon and there’s little extra effort involved.
Sustainability-conscious
People are becoming more self-conscious about what they buy, where they buy from, and how that affects the planet.
Global professional services company PwC’s annual Voice of the Consumer Survey, showed how far consumers would go to make sustainability part of their purchase decisions. Shoppers are willing to pay 9.7% above the average price of goods if they are sustainably sourced or produced, which speaks volumes. For ecommerce brands hoping to scale their business, revisiting sustainability efforts and making it a bigger part of the brand experience could spark more awareness and customer interest.
AI algorithms
More consumers favor omnichannel experiences, giving them the flexibility to shop where and when they want to. What makes it gel?
The intuitive information gathered from mobile phones, tablets, laptops, and shopping carts reveals personal browsing histories, location preferences, and price points most likely to convert to a sale. Through AI and innovative software solutions, ecommerce retailers can personalize customer offers on products they already know they’ll love.
But can value, brand loyalty, sustainability, and shopping intuitiveness alone bring buyers to the purchase table?
What is smart discounting for ecommerce?
With all the inner workings of ecommerce and how to make it thrive, retailers still deal with challenges from outside forces they have little to no control over. Through it all, finding balance between customer wants and business needs can seem out of reach.
It turns out that smart discounting helps consumers and online retailers meet in the middle, and there’s still room for legit profits.
Smart discounting is a strategy using data and insights, identifying the most effective ways to offer customer discounts. Customer behaviors, preferences, and purchasing patterns help determine what characteristics of smart discounting will work. By leveraging the information, businesses can target discounts to specific groups within their customer base, expecting an increased rate of response from new customers and repeat purchases from existing ones.
5 Smart discounting strategies for success
With smart discounting, there’s no reason strategic limitations from the past have to guide the ecommerce future.
Unlock these 5 smart discounting essentials and increase ecommerce order fulfillments.
Personalization
Generic discounts are so meh. To get people excited about product, it’s about making the offer all about them. Through personalization, smart discounting can cater to customers by acknowledging individual preferences and delivering them to their online browsing and shopping experiences.
For example, a wellness brand might offer discounts on a customer’s favorite product, or add a complementary product to a recent purchase. It’s the kind of personalization that keeps customers happy and feeling good about taking the smart discount offer.
Timing
There’s a lot of credibility in the phrase, timing is everything. And because consumers are pickier about the products they buy, and the amount they’re willing to spend, catching their interest at the right time is a huge contributing factor to reaching the order fulfillment process.
When are people more likely to buy? When there’s a reason to.
Special occasions and birthdays are incentives for customers to buy a gift for themselves or someone else while making them feel special in the process. By keeping customers’ birth dates (not the year) in ecommerce databases, it gives retailers the opportunity to design smart discounting campaigns and release them just before Happy Birthday happens.
And by reviewing historical data, ecommerce brands can get an idea of customers’ shopping trends and purchase patterns, using the information to time smart discounting campaigns for maximum results.
Tiered discounts
Whenever the word discount is mentioned, it’s likely to bend the ear of the person that hears it. But what about the business and how those offers impact its bottom-line? There could be a tipping point to smart discounting campaigns, and ignoring the financial aspects could bring unavoidable consequences. So before pushing a smart discounting offer live, make sure to analyze different rates of success and their effects on profit margins.
The good news is smart discounting isn’t a one size fits all program, and because of its flexibility, ecommerce retailers can customize strategies that work best for them and their customers.
Some retailers rely on tiered discounting. It works by setting discounts that escalate with each product purchased, incentivizing customers to spend often. The added sales volume helps retailers maintain levels of profitability, and the ongoing discount communications keep customer retention in check.
Value-add promotions
When lower prices don’t move the order fulfillment needle, new product bundles or free samples and gifts might win customers over.
These value-add promotions can make smart discounted products more enticing, giving customers even more, for less. These types of marketing tactics are popular during off-peak holiday seasons, when consumer interest remains high, and customers are looking for deals that give more bling for less cha-ching.
For skincare brands, value-add promotions can create more exposure for their products by literally putting them in their customers’ hands. Pairing a top-selling perfume with a same-scented body cream sample makes a stronger brand impression and heightens the customer experience by shipping two products for the price of one. And by scheduling a personalized follow-up communication sent to customers at the time they’ve likely run out of the body cream, a new order is bound to happen.
KPIs
Measuring results of any new initiative begins before it starts. For real. Weighing product interest, web page traffic, shopping cart abandonments, and order fulfillments ahead of smart discounting provides a benchmark to compare to. Once the smart discounting goes into effect, responsiveness can be tracked using KPIs (Key Performance Indicators), including average order values, customer retention rates, conversion frequency, new customers, and more.
The metrics provide clues to what’s working and what isn’t, so changes can be made to support customer interest and sales.
The do’s and don’ts of smart discounting
Having the ins and outs of smart discounting at your fingertips helps retailers manage and monitor the process, making adjustments along the way.
For a quick reference, here’s some best practices to include in smart discounting planning, with tips on what to steer clear of.
Do’s
- A/B test smart discounting offers from the first time it launches and with each change made. It’s a great way to try pricing and products, while measuring different audience responses.
- Reward top customers for their brand loyalty and purchasing power. The recognition gives them more reasons to repeat and increase product orders.
- Maintain brand and voice in every communication and when introducing new product lines. The consistency helps customers quickly recognize brands and reminds them why they continue to shop with you over competitors.
- Plan for demand—but of course! It’s what to expect from smart discounting. Revisit inventory management and warehouse locations to verify shipping efficiencies and optimize order fulfillment. You might even need a 3PL partner to get a handle on all the business growth!
Don’ts
- Don’t be overzealous about the frequency of smart discounting or the amount of the offers. Giving customers too many chances at steep discounts can minimize their overall value, bringing quality into question.
- Don’t ignore profitability; they call it smart discounting for a reason. When done right, both customers and online retailers reap benefits, and profit margins will thank you for it.
- Don’t forget to check inventory before the offer starts. A lot can happen from day one to the last day of a smart discounting campaign, and real-time tracking helps keep inventory levels accurate and avoid disappointments that come from the dreaded stockout.
Ecommerce retailers looking for steady growth and scale can find it by adding smart discounting as an operational and marketing strategy. By leveraging the data gathered, online businesses receive greater customer insights to create optimal customer experiences, increasing brand loyalty and sales.
Releasing a smart discounting campaign is no small feat, especially while managing other aspects of ecommerce brands. To balance responsibilities and maximize performance during promotional periods, many retailers work with a third-party logistics partner to help handle the rise in orders, ensure positive customer experiences, and keep staff, systems, and processes operating smoothly.
Ready to put smart discounting to task? Ask a ShippingTree ecommerce order fulfillment expert how it’s done.
