Shopify Discount Types: Everything You Need to Know to Run a Sale

To own a successful business, you need to get creative with marketing your products and services. One of the most effective ways to do this is by offering discounts and sales on certain items. Shopify makes it easy to create discount codes, but your efforts will be wasted unless you know exactly what type of discount code works best for each situation. 

According to studies, 80% of first-time customers purchased from a store after receiving a discount. This is how impactful discount codes can be on a business. With this in mind, it is important to understand the different types of Shopify discount codes and how they work in order to maximize their effectiveness.

Different Types of Shopify Discounts

Shopify categorizes discounts into two: Discount codes and Automatic Discounts. Let’s dive into each one. 

Discount Codes

These are codes that customers enter at checkout to receive a discount. Discount codes come in various forms, including:

• Percentage discounts – Discounts are given as a percentage of the total cost. For example, you can give 10% off when they spend over $100 or 20% off when they spend over $200 
• Fixed amount discounts – Fixed amounts are taken from the total cost. For instance, you could offer a flat rate of $10 off an order worth more than $50 
• Free shipping discounts – Customers get free shipping for orders that meet certain criteria, such as spending more than a certain amount. 
• Buy one get one free discounts – Customers are offered an additional item for free when they buy a certain number of items. 

Automatic Discounts

Some discounts are applied automatically to the order total without customers needing to enter any codes at checkout. These discounts can be set up in Shopify and include the following: 

• Product-specific discounts – Certain products are discounted regardless of how many items customers buy. For instance, you might offer 10% off all shoes in your store. 
• Collection-specific discounts – Similar to product-specific discounts, this type gives a discount on an entire collection rather than just one product. For example, you could give 15% off all dresses in your store. 
• Order amount-based discounts – A discount is given based on the total cost of an order. For example, you could offer 10% off orders over $100 or 20% off orders over $200. 
• Customer tag-based discounts – A discount is given to customers who have been assigned certain customer tags in Shopify. You can use this to reward loyalty by giving regular customers a special discount code that they can enter at checkout. 

How To Use Shopify Discounts 

Discount codes and automatic discounts can be used in tandem for maximum effectiveness. Let’s take a look at how to set each up on your Shopify store.

Setting Up Discount Codes

The first step is to create the discount code itself. You can do this by going to the Discounts section in your Shopify admin and selecting Create Discount. From there, you’ll be able to choose the type of discount (percentage or fixed amount) and enter the details, such as what products it applies to, how long it’s valid for, and so on. 

Once created, you can promote your code through various channels, such as email campaigns or social media posts. This is an effective way of driving customers to your store with compelling discounts they won’t want to miss out on.

Remember that when you create a discount code, you need to incorporate these details:

1. Validity of your discounts: When does your offer expire?
2. Number of uses: How many times can the code be used before it expires?
3. Discount amount: What’s the percentage or fixed amount customers will get off their orders?
4. Products that are eligible for discounts: Specify which products or collections are included in your offer. 

Before creating your discount codes, you also need to consider the following:

• Only 100 specific customers, products, and variants can discounts code be applied to, so you need to be mindful when setting up your discounts. 
• You can set discounts to expire at a certain date and time or after they’ve been used a certain number of times.
• A limit of 20,000,000 unique codes can be generated for each store
• Automatic discounts and discount codes cannot be used in combination with each other. 
• Make sure that the URL you use to promote your discounts has the correct code.
• Timezone settings must be considered to ensure that your discounts are applied correctly.

Setting Up Automatic Discounts

Automatic discounts are great for running large-scale sales, such as Black Friday or Cyber Monday. You can set up automatic discounts by going to the Discounts section in your Shopify admin and selecting Create Automatic Discount. 

You’ll be able to choose the type of discount (percentage or fixed amount) and enter details about what products it applies to, how long it’s valid for, and so on. 

After creating, customers will automatically receive the discount when they make a purchase from your store without needing to use any codes at checkout. This is an effective way of driving more sales and attracting new customers. 

Note that automatic discounts precede discount codes, so the customer will receive the automatic discount if available but not the code. In short, customers cannot use both at the same time. 

Creating More Buzz

As mentioned earlier, after creating these awesome discounts, you can share them via email, ads, social media posts and more. But there are more effective ways of spreading the word about your discounts. 

Giveaways and Contests

Giveaways and contests are a great way to attract more attention and create more hype around your discounts. 

For example, you can create a Facebook or Instagram post where customers have to share the post and tag their friends for a chance to win an awesome discount. This is an effective way of not only creating more buzz but also growing your customer base. 

To make it simpler and more effective, using Woorise to create giveaways and contests can save you a lot of time and energy. Woorise allows you to create, launch, manage and track your giveaways and contests in one place.

All you need to do is set up the rules for your giveaway or contest, customize it with beautiful designs, promote it via social media or ads and watch as customers flock in.

You can choose from hundreds of templates and customize them to suit your brand. Woorise also has a feature that allows you to run multiple giveaways and contests at the same time so you can promote different discounts for different products or collections. 

Pre-Launch and Pre-Orders

Another way to create more buzz and boost your engagement is via pre-launch and pre-orders

Pre-launch and pre-orders are great ways to build anticipation around your discounts. You can set up a page on your store where customers can sign up for early access to exclusive discounts. This is an effective way of giving customers something to look forward to and creating more buzz about your products or services.

However, Shopify is very limited when it comes to managing pre-orders. Fortunately, there are several landing page builders you can install that will help you set up pre-launch and pre-order campaigns – such as the Woorise, in which you can easily and quickly set up pre-order campaigns and manage the orders. As an added bonus, you can add a countdown timer to create more urgency and excitement.

Why Use Discount Apps

As much as we love Shopify as a whole, the platform has certain limitations that make it difficult to run sales. That’s where discount apps come into play. They provide store owners with a wide range of different discounts, enabling them to offer their customers better prices and increase their sales.

For example, Bulk Discounts allow store owners to set up tiered pricing for their customers. This means that the more a customer buys, the less they pay per item. However, Shopify’s built-in discounting tool doesn’t allow for this. An alternative way is to have a Bulk Discounts Manager Shopify app; it doesn’t just manage your overall sales campaign but also allows you to create bundled promotions and discounts for any product or collection.

As mentioned above, incorporating discount apps for contests and giveaways, pre-launches and pre-orders makes your product and store more attractive to customers. It creates buzz and excitement around your product launch and also helps to build customer loyalty with discounts for returning customers.

When To Use Your Shopify Discounts

Yes, discounts can be a revenue-boosting strategy – but they need to be used at the right time for you to gain maximum benefit. As a Shopify store owner, it is important to understand the different types of discounts available and how best to use them. 

1. BOGO(Buy One Get One)

This is the simplest of all discounts. It allows you to offer a free item when one is purchased. This type of discount works especially well for products with high perceived value or items that are frequently purchased together, such as sunglasses and cases.

2. Percentage Off 

Offering a percentage off your product can be an effective way to increase sales quickly. You can use it in combination with other discounts or on its own as a stand-alone incentive to encourage customers to purchase from your store more often. 

3. Free Shipping Discounts 

If you have expensive shipping costs, offering free shipping can be a great way to encourage customers to purchase from your store. It is also an effective way to increase average order values and boost sales. 

4. Free Gift with Purchase 

Giving away free gifts with purchases is a great way to reward loyal customers or provide incentives for new ones. This type of discount works especially well for high-value items that customers may not otherwise buy without the extra incentive of the free gift. 

5. Time-Limited Discounts 

Time-limited discounts are a great way to create urgency and drive conversions by giving customers only a certain amount of time in which they can take advantage of the discount. 

6. Product-Specific Discounts

This type of discount is used to target specific products in your store. It goes well for items that you want to push or need to move quickly, such as seasonal products. 

7. Collection-Specific Discounts

You can use this to target specific collections in your store. It works well for items that you want to push or need to move quickly, such as seasonal products. 

8. Order Amount-Based Discounts

This is a great way to reward customers for making larger purchases. You can choose to offer a certain percentage off the total order amount or give away free items when customers reach a certain threshold. 

9. Customer Tag-Based Discounts

Finally, you can also use customer tags to target specific groups of customers with discounts. This could be a great way to reward your most loyal customers or incentivize new ones to make purchases. 

Bottom Line

Shopify discount types are a great way to increase sales, entice new customers and reward loyal ones. Discount codes and automatic discounts are the two types of discounts that can be used to create special offers for customers. 

Discount codes are applied manually by the customer, while automatic discounts are enabled through rules and conditions set up in the Shopify admin. Both types of discounts give merchants an opportunity to increase their revenue, as well as boost customer loyalty. 

And if you want to expand and customize your discounting options further, there are a number of Shopify discount apps available to do just that. These apps allow you to create unique discounts based on customer segmentation, quantity thresholds and more.

Overall, using different types of Shopify discounts is an effective way to increase sales and reward customers without compromising revenue or profitability. Knowing which type of discount works best for each situation will ensure you get the most out of your campaigns while also ensuring that customers remain satisfied with their purchases.

Finally, don’t forget to track your marketing campaign to make sure your discounting efforts are paying off. This way, you’ll be able to identify which discounts and campaigns are working and tailor them to ensure maximum success.