Are Online Discounts Ruling Over Customers’ Minds?

The dynamics between retailers and customers have changed significantly in the recent past with increased customers inclination towards online shopping rather than store shopping.

According to the latest PayPal mCommerce Index Trends Report, 57% of the Australians opt for online shopping; majority being the younger generation who likes to shop from their mobile devices.

With a rapid change in the customers’ behaviour and buying patterns, it’s very evident that the retailers need to rethink their strategies and actions to attract customers. Offering discounts is one of the most commonly known methods of enticing new customers. As per PayPal’s report, 68% of Australian consumers buy the products, which comes with a discount.

Discounts offered on special occasions have created a lot of stir among consumers. In Australia, events like Boxing Day, End of Financial Year and America’s Black Friday drive more customer attention due to their heavy discounts and promotions. The consumer participation to avail the discounts during the ‘Sale Season’ is skyrocketing.

Most Popular Sales Periods By Consumer And Business Participation (Source: PayPal mCommerce Index Trends Report)

Discounts also drive impulse purchasing and unplanned spend from customers. PayPal’s recent report indicates that around 58% of the Australians have made unplanned purchasing decisions because the products were on sale. The average shopper bought 2.7 items and spent $108 without planning or need to buy the products.

Nearly 37% of Australians desires brands to offer online discounts outside traditional sales periods (e.g. in addition to Black Friday, Boxing Day, EOFY). This number jumps to 44% for the Gen Z and 46% for the Gen Y shoppers.

Around 18% Australians suffer from ‘fear of missing out’ sale period, as they feel they are losing money, if they don’t buy on time.

Furthermore, 46% of Gen Z and 48% of Gen Y bought a brand online that they wouldn’t usually buy because it was on sale.

  • One-third (34%) have also purchased items they didn’t need because of a sale.
  • 53% of retailers said Online Sale attract new customers.
  • Two-in-five retailers (39%) said online sales increase revenue and one-third (34%) said customer basket sizes are bigger

To drive more sales, retailers are taking the help of Visual Search and Shoppable Videos. As per PayPal’s report, Visual Search and Shoppable Videos are set to become a big part of the mobile shopping cycle, especially for younger consumers. While many smaller operators would struggle to offer these tools on their own, more turnkey solutions are emerging.

Australian consumers are now expecting regular discounts from retailers, and many have modified their shopping behaviours in response. However, offering sale should not be a tactic that squeezes the company’s margins with no long-term benefits.

If discounts are provided strategically, it can attract new customers, increase basket sizes and build loyalty.


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