Impact of volume discounts on Shopify?

[Enon]

Has anyone implemented dynamic pricing or volume-based discounts on Shopify? Curious how it's impacted customer retention and order value.

[Akohub]

Hey there @Enon this is Alexis from Akohub. We've been working with many Shopify brands, from big to small, including Nike, Logitech and LINE Friends Taiwan. We hope our expertise would be helpful! Based on our experience, volume-based discounts can definitely help boost order value by encouraging customers to buy more in one go. For example, offering a “Buy 2, Get 10% Off” or similar tiers can be really effective, especially for products that customers tend to stock up on. For example, GreenLeaf Organics, an online skincare store, boosted their average order value by 25% through volume-based discounts like “Buy 2, Get 10% Off” and “Buy 3, Get 15% Off,” encouraging customers to purchase more in a single order. To build on this, they’re now exploring a loyalty program for long-term retention. 

However, for long-term customer retention, we’ve found that loyalty programs can work even better. A well-designed loyalty program rewards customers for repeat purchases, giving them points or perks that make them want to keep coming back. It’s a nice way to keep them engaged over time rather than just for one larger purchase. Of course, you can try out our app Ako Marketing (all-in-one marketing app that combines loyalty, retargeting and CRM). Our client, SMOOSY boosted their revenue by 50% with our app. You can learn from them in our case study here

So, if you’re looking to boost retention as well as order value, maybe try combining both strategies. Use volume discounts to increase order sizes and a loyalty program to build that repeat customer base. It’s worked well for us, and customers seem to really appreciate the added value. Good luck!

[Ellie-BOGOS]

Hi @Enon 

This is Ellie from BOGOS, the #1 Shopify Promotion App!

Dynamic pricing and volume-based discounts are among the most popular types of sales promotions for Shopify merchants. Based on my experience, this might be how it affect the business:

• Higher customer satisfaction rate, because these discounts make customers feel like they are getting the best available price
• If the discount is appealing enough, customers will want to buy regularly -> increase repeated purchase
• Both these types discount encourage bulk purchases and make customers increase their order size, which means they are likely to spend more in one purchase
• These discounts work for many merchants because they are good at promoting exclusivity and personalization

Some Shopify stores have reported increase in AOV by ~ 20% after using volume discounts or dynamic pricing. But keep in mind that these numbers do not apply to all industries, and depending on your strategies, customers reaction will be different!! (sources: Amazon, Shopify)

[LizHoang]

Hi @Enon , thanks for your question. 

Many Shopify merchants have successfully implemented dynamic pricing and volume-based discounts to boost customer retention and average order value (AOV). Offering discounts based on the quantity purchased or the cart value encourages customers to buy more in one order, which can lead to higher overall sales and improved customer loyalty.

For example:

- Volume Discounts: Offering discounts like "Buy 1-3, get 10% off" or "Buy 4-6, get 15% off" incentivizes customers to increase their order quantity. This can particularly benefit merchants selling consumables or frequently repurchased items.

- Buy X, Get Y Free (BXGY): An approach like "Buy 2, Get 1 Free" adds extra value for customers and increases purchase size, making it more likely they’ll return for more.

- Tiered Discounts: Offering discounts that grow with cart value, such as "$10 off $50, $25 off $100," motivates customers to spend more per order.

If you're looking to implement dynamic pricing or volume-based discounts on Shopify, I recommend you try the AOV Free Gift - Buy X Get Y + BOGO, which offers a variety of upsell and gifting options, including Buy One Get One (BOGO), Collection Gift, Quantity Gift, Volume Discounts, and Buy X Get Y (BXGY), all designed to encourage larger purchases and quicker checkouts. Plus, it integrates seamlessly with Shopify discount codes, so customers can easily combine offers. Additionally, the app offers engaging widgets to capture attention, and 24/7 one-on-one support is available to guide you every step of the way. 

I hope my answer is helpful to you!

Liz

[Bundler-Manuel]

Hey there @Enon from my experience with working with a lot of store owners, volume discounts can have a positive effect if they are set in the right way. However one must not get carried away and tie in their entire product values to discounts, meaning that it is important to ensure that those products are higher quality than they are actually being sold at with those discounts. As someone in the replies already mentioned, it might be more beneficial to include loyalty programs instead or after a certain number of months of using the discounts.