Discounts metric shows the total amount of discounts offered by the store to customers over a given period of time. It helps in analyzing the effectiveness of promotional activities and their impact on the store's revenue.
With Databox you can track all your metrics from various data sources in one place.
The Discounts metric tracks and quantifies the overall value of discounts that a business provided to customers during a specific timeframe.
This metric can help businesses understand the efficiency of promotional activities and their impact on overall revenue.
These discounts can be in the form of markdowns, promotional codes, free shipping, gift cards, loyalty rewards, bundle deals, or any other incentive that reduces the standard purchase price.
To calculate the discounts metric, you basically need to sum up the monetary value of each discount you ran in the specific time period.
The formula is simple:
Discounts Metric = Value of all discounts offered
Suppose an ecommerce store offered the following discounts during a particular month:
To calculate discounts for the given period, simply add up the value of all the discounts:
Discounts Metric = $500 (smartphone discount) + $300 (laptop discount) + $100 (headphone discount) + $50 (free shipping) = $950
Using the formula, we see that the discount value for the specified month is $950 for the ecommerce store.
Discounts are one of the best tools for attracting new customers, boosting sales, and fostering long-term customer loyalty – and this isn’t anything new.
However, simply offering discounts without a thoughtful approach won’t get you far.
To really leverage the power of discounts, you need well-crafted strategies that will push customers over the purchasing edge and make your offers almost impossible to ignore.
Here are a few interesting strategies you can try out:
More resources to help you improve:
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Databox is a business analytics software that allows you to track and visualize your most important metrics from any data source in one centralized platform.
To track Discounts using Databox, follow these steps:
Elevate your Shopify store with Databox's E-commerce Sales Performance template. Gain insights on Total Sales, Orders, Gross/Net Sales, and Average Order Value empower data-driven decisions, fostering growth and maximizing revenue.
Use this Shopify report to share important ecommerce performance metrics around orders, sales, products, customers, and more.
‘Gross Sales’ and ‘Discounts’ standard and dimensional metrics will be off by some cents on some days if ‘taxes included’ is checked in the connected Shopify account.
The reason for this, using the Discounts metric example, is that Databox has to calculate the actual discount from the values it gets from the API by subtracting the tax from it. This is done by calculating the tax with the tax rate and the discounted amount, which often yields decimal numbers, but Shopify has its own way of rounding these numbers in the User Interface. As a consequence, when observed with Daily granularity, some days may have discrepancies by a few cents due to rounding.
Affected metrics: Discounts ˪ by Billing City ˪ by Billing Country
Gross Sales ˪ by Billing City ˪ by Billing Country ˪ by Top Products ˪ by New vs Returning Customers ˪ by Product Vendor
One of the best ways to measure discount success is by evaluating KPIs such as conversion rate, average order value (AOV), and overall profitability. These metrics help determine whether (and how much) the discounts have been effective.
The two main types of discounts are:
The most effective type of discount for your business will depend on your specific goals, business model, industry, and target audience. It usually takes a while of testing and refining until you find just the right approach.
Percentage-based discounts are generally more effective for promoting higher-priced items or encouraging larger purchases, while fixed-amount discounts tend to be more useful for lower-priced items.
A combination of both discount types in a well-planned and targeted approach is usually the most effective.
Net sales is the total sales revenue generated by a business after accounting for returns, discounts, and other deductions. It is a key metric to measure a company's profitability.
Equates to Gross Sales - Discounts - Returns + Taxes + Shipping Charges during the specified Date Range. Total Sales will be a positive number for a Sale on the date that an order was placed, and a negative number for a return on the date that an order was Refunded.
The Orders metric on Shopify represents the total number of purchases completed by customers, providing insights into sales performance, customer behavior and trends.
Number of shipping charges associated with a sale or return during specified date range.
Net sales by Top products is a metric that shows the total revenue generated by the best-selling products on a Shopify store. It helps merchants to determine which products are driving revenue and which ones may need optimization.
Equates to Gross Sales - Discounts - Returns + Taxes + Shipping Charges during the specified Date Range split up by Billing City.
The Discounts by Billing Country metric shows the total amount of discounts applied to orders based on the country where the customer's billing address is located.
Abandoned checkouts metric refers to the number of customers who added items to their cart but failed to complete the purchase, which can help merchants identify potential issues in the checkout process.