The Holidays bring important opportunities for businesses. And with the season just around the corner, many companies are preparing their holiday sales plans. Holiday discounts are one particularly common tool. While widespread, what types of discounts are the most effective? This is the question iMedia Connection addresses in a recent blog post. Katya Constantine, an ecommerce expert, discusses her findings, which are accompanied by a helpful infographic compiled by Flagship Research.  

"There are many options to incentivize potential customers, including free shipping, percentage discounts and amount discounts. Consumers respond differently to each discount type based on their age and other factors," explains Constantine. Equipped with this knowledge, companies are better able to determine which discounts to offer to different customers during the upcoming holiday season.

As Flagship Research's infographic makes clear, younger and older customers respond to discount types differently. Whereas younger customers are more likely to prefer percentage discounts, older customers typically prefer free shipping. 

Here are the most effective customer incentives according to online retailers, who were surveyed by Flagship:

  • Percentage Discount: 30.0 percent
  • Free or Discounted Shipping: 21.8 percent
  • Amount Discount: 12.7 percent
  • Dynamic Discount: 7.3 percent
  • Loyalty Program: 5.5 percent
  • Multiple Purchase Discount: 3.6 percent
  • No Specific Offer is More Effective: 18.2 percent

As the list demonstrates, percentage discounts and free or discounted shipping are, indeed, the most effective. However, a large segment of online retailers believe that no discount type is necessarily more effective than others.

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