Discounts are an important promotional tactic retailers use to drive sales. So much so that discounts were a major factor for three out of four U.S. online shoppers in 2023, luring consumers away from shopping at other retailers, getting them to increase their basket size, and convincing them to make purchases they otherwise wouldn’t. Discounts have a particularly strong impact on food purchases, where 90% of consumers reported stocking up on groceries when they were on sale.
Research: Smaller, More Precise Discounts Could Increase Your Sales
Why bigger discounts don’t necessarily attract more customers.
June 07, 2024
malerapaso/Getty Images
Summary.
Retailers might think that bigger discounts attract more customers. But new research suggests that’s not always true. Sometimes, a smaller discount that looks more precise — say 6.8% as compared to 7% — can make people think the deal won’t last long, and they’ll buy more. In a series of nine experimental studies involving around 2,000 individuals considering online or retail purchases of a variety of products, the authors found precise discount depths — the difference between the original and sale price — can increase purchase intentions by up to 21%.