Discounting is one of ecommerce’s oldest tactics. A proven lever for driving conversions, boosting AOV, and enticing new customer sign-ups. It’s a simple, effective value exchange. But it’s also safe to say many retailers often over-rely on it.
Our Intent Gap report added another statistic to support this. In a OnePoll survey of online shoppers, 83% said they use discount codes when they would have bought at full price.
83%. That’s a staggering amount of lost margin. And all without any measurable benefit.
Of course, we have our view on the problem with the status quo of discount codes. But putting aside the strategic choice of whether or not to offer promotions, it’s our stance that retailers aren’t wrong to lean on discount codes. It’s one of the few trading levers that delivers both speed and impact.
The real issue isn’t that they are being used. It’s how they’re being used.
We wanted to understand how retailers think about this. Is this just the price of doing business? Do they see a way out? To explore this, we spoke with seven ecommerce experts about how discount codes work today, what’s broken, and what they wish they could do differently.
The Status Quo of Discount Codes
“Marketers congratulate themselves that their discount code campaign hit all the right KPIs when the reality is that many (all?) of those customers might just have converted without it. They’ve become a drug we can’t wean ourselves off.”
Marty Hayes, Senior Manager, Ecommerce Specialist
For many teams, discounting feels like second nature. The campaign goes out. The numbers tick up. Everyone breathes a little easier. But Marty’s observation challenges the feel-good metrics. When discounts are applied by default, without knowing who genuinely needs them, they risk being a comfort blanket for the brand more than a value-add for the customer.
“In my experience, today’s retailers have transformed discount codes from occasional promotions into permanent fixtures.”
Emma Olliff, Head of Digital and eCommerce
Emma highlights the same trend through a different lens. What began as a tool to incentivise behaviour has become hardcoded into the purchase journey. If a tactic is always on, it stops being a lever. It becomes the environment. That shift affects not just performance, but perception.
“We use pre-determined discount codes to get customers across the finish line. Our codes are $50 for $1000 or more, $100 for $4500 or more, and $200 for $7500 or more.”
Forrest Webber, Owner
Forrest's experience shows a different side of the same issue. His discount strategy is measured, value-tied, and deliberately structured. And yet, if given the choice, he wouldn't offer them at all.
“To be frank, I would not offer them. But in the competitive ecommerce landscape, sometimes you have to give something up to get something in return.”
Forrest Webber, Owner
That tension is telling. It reflects a broader discomfort that many ecommerce leaders feel: not that discounting doesn't work, but that it often doesn't feel right.
Discounting has moved from a considered lever to a habitual tactic. And when something becomes automatic, it stops being strategic.
The Cost of Blanket Discounting
“We’ve always known there was an opportunity to improve our checkout conversion. We’ve tried offering discount codes and free delivery to everyone, but it comes at a huge cost, impacting profitability too much.”
Jay Shufflebottom, Trading Manager
Jay calls out the trade-off directly. Discounts may move the needle on conversion, but they can quietly crush profitability in the process. For teams under pressure to hit targets, it's easy to chase uplift without accounting for margin.
It’s a pattern familiar to many. The default, sitewide offer applied in the absence of context. In contrast to the automated, habitual discounting described earlier, Jay points to a more deliberate path. One that balances cost with confidence, rather than urgency with erosion.
“We want less compromise. We want to give customers more of what they need, the experience they want, and everything that will help them make a decision. We want to give discounts to customers when they need them the most.”
Jay Shufflebottom, Trading Manager
Jay isn’t just asking for better targeting. He’s pointing toward a deeper rethink - one where discounts become a relevant, timely nudge instead of a catch-all incentive. It’s not about discounting less. It’s about discounting with purpose. That purpose is as commercial as it is customer-centric: fewer wasted incentives, more protected margin, and stronger relevance in the moments that matter.
The message here isn't anti-discount. It's pro-precision. Jay wants to swap broad strokes for sharper tools. That means timing, not just triggers.
“It can be tough to track whether discounts are actually boosting long-term customer value or just attracting deal-seekers.”
Tom Armenante, Ecommerce Director
Tom raises the performance measurement problem. Without a clear view of incrementality, teams risk giving away margin to customers who never needed the extra push. In those moments, discounting becomes a tax on conversion, not a driver of it.
The costs of blanket discounting run deeper than most metrics can show. It may lift the top line, but often erodes everything underneath.
Customers Come to Expect Discounts
“Retailers have created a dependency cycle where customers won’t buy without feeling like they’ve ‘won’ a deal. This addiction to discounting erodes brand value and trains shoppers to wait for sales rather than recognising true worth.”Emma Olliff, Head of Digital and eCommerce
Emma brings the brand lens. Performance isn’t just about the transaction. It’s about perception, loyalty, and price integrity. When your audience expects a deal, your full price loses credibility.
And this doesn’t just happen in-session. Ecommerce discounting has created a self-reinforcing problem. Retailers rely on always-on discounts, and in turn, shoppers have learned to search for discount codes before checking out.
“It’s become second nature once customers have added their chosen product to cart, to open up that new tab and search for ‘XXX discount codes’.”
Marty Hayes, Senior Manager, Ecommerce Specialist
We’ve all done it. That reflex to check for a code before checking out isn’t a fringe behaviour. It’s the new norm. And it’s not just driven by price sensitivity. It’s driven by pattern recognition. Shoppers have learned the rules.
In our Intent Gap report, we also learned 85% of shoppers search for codes before buying. Yet 83% would have purchased without one.
“Customers become conditioned to expect discounts, reducing their willingness to buy at full price.”
Mathew Vermilyer, Senior Director of eCommerce Analytics and Optimisation
Mathew takes it a step further. Conditioning doesn't just shape behaviour. It reshapes value. The more shoppers wait for a deal, the less urgency – and perceived worth – the product holds.
“Codes are often leaked on coupon sites or found by AI chatbots.”
Niklas Bräutigam, Digital CRO Manager
Niklas highlights a structural flaw. Even when brands try to be selective, discount codes are rarely contained. They escape. They get scraped, shared, reused. That leakage doesn’t just undermine margin. It breaks the intended value exchange.
Customer behaviour isn’t fixed. But it’s shaped by what they see. And right now, they’re being trained to expect discounts by default. Smarter alternatives have to break that pattern.
So, What’s the Alternative?
“It would also be great to test different discount structures like tiered offers or exclusive perks to see what actually works best. Discounts are a great tool, but they need to be used strategically.”
Tom Armenante, Ecommerce Director
There’s no call here to abandon discounting. But Tom makes the case for rebuilding it. The answer isn’t fewer offers. It’s smarter ones. Tiered incentives, exclusives and thresholds aren’t new ideas, but they are rarely tested with rigour.
If default discounting has created dependence, it’s in retailers’ interests to break it. Both in the timing and the nature of the offer.
“If we could offer free delivery only to people showing hesitancy or a high likelihood of abandoning the journey, that would be a game changer.”Jay Shufflebottom, Trading Manager
“What we need isn’t more codes, but smarter personalisation that rewards genuine loyalty instead of bargain-hunting behaviour.”
Emma Olliff, Head of Digital and eCommerce
Emma and Jay make the distinction clear. Targeting by context or real-time behaviour is better than targeting by default or simple rules. If a well-timed discount could be the difference between a sale or not, wouldn’t you want to offer it? Similarly, you may feel a loyal buyer deserves a reward, but not want to incentivise a one-time deal hunter.
“One idea might be to display a discount if a customer is really struggling at checkout, entering expired coupons, incorrect codes, rage clicking, showing exit intent, or spending an abnormal amount of time in checkout.”
Mathew Vermilyer, Senior Director of eCommerce Analytics and Optimisation
Mathew suggests one of the most practical shifts: linking offers to friction. A well-timed discount isn’t just persuasive. It’s supportive. It helps the customer keep going, rather than feeling pushed.
“Instead of offering the same code to everyone, retailers should provide personalised discounts only when necessary. I wish there was more use of Multi-Armed Bandits to continuously adjust discount offers based on real-time customer behaviour for better results.”
Niklas Bräutigam, Digital CRO Manager
Niklas brings in the optimisation layer. In other words, letting the algorithm run smarter tests by responding to customer behaviour, not just rules.
Personalisation doesn’t have to mean more segmentation. It can mean better responsiveness. When the system adapts based on what it sees, offers can stop being guesses.
All this hints that the future of discounting isn’t catch-all. It’s adaptive, behavioural, and already being tested by the brands getting it right.
Approaching Discounts With Intent
“We had one test with different variants. A showed everyone a delivery discount code, while B, C, and D only offered discount codes to those showing certain intent signals like hesitancy or abandonment.
As expected, both showed an uplift in sales, but the intent-based variants (B, C, D) delivered a much more profitable overall result with only a small difference to the top line uplift, which was a surprise.”
Jay Shufflebottom, Trading Manager
This is where the theory meets the real world. Jay ran the test on an alternative approach. And Intent-based discounting didn’t just work. It got more from less. The business gained almost the same conversion uplift, but with significantly more profit.
And this doesn’t just apply to discount codes. Delivery incentives, reassurance messaging and urgency prompts all become more effective when triggered by behaviour, not assumptions. Two recent plays from Buy It Direct Group bring this idea to life:
Better Bathrooms increased conversion rate by 8% by focusing on visitors who had built purchase intent but were showing signals of abandonment. Offering discounts only when behaviour signalled uncertainty.
Appliances Direct saved 42% margin (with only a minimal drop-off in orders) by only discounting visitors with high intent to purchase who were displaying clear exit signals.
These plays proved that relevance, not reach, is what makes a discount powerful. Intent-led discounting isn’t about doing more or less. It’s about doing what’s needed, only when it’s needed. The retailers doing this are seeing the impact where it counts.
Mathew neatly summarises the potential future of discount codes:
“Ideally, I would like retailers to have more dynamic and personalised discounting strategies, adjusting offers based on real-time customer intent, loyalty, and profitability.”
Mathew Vermilyer, Senior Director of eCommerce Analytics and Optimisation
Retailers aren’t turning their backs on discount codes though. Not yet. Even if they do see the cost of blanket offers, the risk of conditioning shoppers, and the danger of mistaking uplift for impact. Even if they are starting to call time on indiscriminate, always-on offers.
But while they are questioning how discounting is being used, they don’t see themselves completely abandoning it. Even if they want to. Instead, they want to redeem it. With smarter timing. With real relevance. With intent.
Want to protect your margin and personalise discounts at scale? Explore Discounting with Intent.
Thanks again to all the ecommerce experts who shared their thoughts with us:
Marty Hayes, Senior Manager, Ecommerce Specialist
Jay Shufflebottom, Trading Manager at Buy It Direct Ltd.
Tom Armenante, Ecommerce Director at GTSE
Emma Olliff, Head of Digital & eCommerce at W-Wellness
Niklas Bräutigam, Digital CRO Manager
Mathew Vermilyer, Sr. Director of eCommerce Analytics and Optimization
Forrest Webber, Owner at fireplacedistributor.com
