The idea of Discount in retail
Discount is a pricing strategy used with the aim of increasing customer traffic, discharging inventory, and increasing sales. With this strategy, retailers will mark down the prices of products or services.
Types of discounts
Loyal member discounts
Loyal member discounts are applied based on customers’ buying habits. When customers have made a certain number of purchases for a long period of time, you can consider sending them loyal member discounts. This discount strategy is an effective way to express how businesses value their customers.
Seasonal discount strategy is mainly used in order to discharge inventory left from previous seasons. Businesses can send these discounts to all customers and encourage them to buy out-of-season items.
Promotional discount programs are only offered during a limited period, especially during special holidays. Retailers use this type of discount to increase customer traffic and simultaneously boost sales. Some possible programs can be: Buy one get one or Percent-off discount.
Businesses usually offer this type of discount when the customers buy in bulk. If it is a business-to-business transaction, the volume discount strategy is the best suitable.
A cash discount program is a reward for the immediate payment of invoices for goods or services. Businesses can use this program to encourage customers to purchase during a specific time period, and at the same time they have immediate payment to re-invest.
Using this discount strategy means that businesses will apply different prices for certain products or services based on their brick-and-mortar store location. Since the costs for transporting items to different areas are varied, geography discounts are mainly based on shipping cost.