Businesses have been using sales promotions as a marketing technique since at least the 19th century. With 55% of surveyed customers saying they actively search for discount codes to reduce their spending, and some 18% using deal and review sites for inspiration, modern retailers have good reason to keep offering them.
You can use sales promotions to grow revenue and brand awareness, clear old inventory, attract customers to a new product line, and capitalize on seasonal spending such as Black Friday or Cyber Monday (BFCM).
Here, explore the pros and cons of sales promotions, browse common promotion types, and learn how to plan a sale and measure its success.
What is a sales promotion?
A sales promotion is a short-term marketing tactic that gives shoppers a reason to buy now, such as a discount, gift, or special offer. It can also help generate brand awareness or customer loyalty.
Pros and cons of sales promotions
Two reasons retailers offer sales promotions are to:
Increase sales
The Black Friday and Cyber Monday “shopping holiday” is an opportunity for retailers to boost sales and attract new customers through promotions.
Black Friday Cyber Monday 2025 saw more than 94,000 Shopify merchants experience their highest-selling day ever. Together, they generated $14.6 billion in sales over the weekend, up 27% from 2024.
Build loyalty
Promotions can encourage repeat purchases and help turn first-time buyers into regular customers.
For example, Allbirds offers $15 off a future purchase when customers refer a friend (who also gets $15 off), giving customers a reason to return.
Two drawbacks of sales promotions are:
Brand dilution and price conditioning
Running too many promotions can lead consumers to think your brand is “cheap,” according to 11.7% of shoppers surveyed by growth marketing firm Power Digital. In the same survey, another 10.6% said they’ve abandoned brands that offer aggressive markdowns.
“If you start pushing discounts all the time, people will only buy when they get a discount,” says Daniel Brinch, partner at Camille Brinch, in a Shopify Masters episode.
Margin pressure and misleading sales data
While promotions can boost sales, they may also hide weak underlying demand. Check POS reports to see if your on-sale bestsellers also sell well at full price. If they don’t, the promotion could be masking poor product-market fit or low brand loyalty.
With margins already under pressure, heavy discounting can make it harder to protect profit.
Types of sales promotion techniques
- Giveaways
- Bundling
- Buy one, get one (BOGO) free
- Charitable donations
- Free shipping
- Subscriptions
- Upsells
- Discounts
- Value-added promotions
- Loyalty marketing
Here are some common types of sales promotions:
Giveaways
With giveaways, you offer a prize in return for participation in a publicity event. The event could be a sweepstakes, raffle, lottery, orcontest, depending on your goals and what’s legal in your area. Choose a prize that your customers need or want.
Astrid & Miyu, for example, ran a giveaway to celebrate the launch of its new personalized jewelry line co-created with fellow retailer Kat Clay Studio. Participants had to follow both brands on Instagram, like the post, and tag a friend in the comments. The winner received a free box of jewelry charms from the collab.
Bundling
Bundling discounts encourages customers to buy two or more items together at a lower combined price. Selling bundles can help you increase order size, move inventory faster, and drive product visibility.
Buy one, get one (BOGO) free
BOGO, sometimes styled BOGOF, is a buy one, get one free deal. If increasing sales volume is more profitable than selling single items—which all depends on a particular item’s profit margin—then offering a BOGO deal can increase profits.
BOGO sales are a tactic that you can use year-round, including during BFCM. Consider promoting BOGO sales on social media to drive traffic to your site.
Charitable donations
Including a charitable donation with each order can benefit the charity, strengthen brand perception and goodwill, and give customers a positive reason to buy.
Free shipping
When coffee concentrate company Kloo offered free shipping, it pleased customers and gave the brand a profit boost, says co-founder Claudia Snoh in a Shopify Masters episode: “We got rid of the shipping fee and instead we upped our minimum quantity to two bottles per order, so we were able to really satisfy our customers’ needs by reducing the price and eliminating the shipping fee, but it also actually made us more profitable on the unit economic side.”
Depending on your goals, you can offer free shipping with first orders (to entice new customers) or with every order above a certain threshold (to increase average order value). Review profit margins to calculate what you can afford.
You can also run free shipping promos on special occasions like BFCM or Christmas, or combine them with other discounts, as Light Your Home did for BFCM 2025.
Subscriptions
Subscriptions like Heatonist’s monthly hot sauce boxes reward customer commitment with discounts or special perks—in this case, limited-edition stickers and access to new product drops.
You can sell subscriptions for information products, such as publications or digital goods, or for physical products like food or clothing.
Upsells
An upsell is when you offer a customer an additional or upgraded product or service during a sale. Upsells can be lucrative: Aftersell reports that adding two upsells to a sale can increase revenue by up to 20 times.
Tip: Apps like Marsello, which integrates with Shopify POS, and Frequently Bought Together recommend items to customers based on their cart content.
Discounts
A flash sale is a limited-time sale. Revealing flash sale details at the last minute is a tactic intended to create a sense of urgency and prompt shoppersto buy before items sell out.
For BFCM 2025, beauty brand Made by Mitchell promoted its flash sale on TikTok. Viewers could see discounted items in the founder’s shoppable post, then click through and purchase via TikTok Shop.
Get started: Create discount codes for online and in-store purchases through Shopify, then view your sales report to see how often customers use them.
Value-added promotions
While 45% of shoppers surveyed by Power Digital prefer traditional percentage-off deals, an equal number prioritize alternatives such as bundles, loyalty perks, and “dollar-off” promotional offers.
Examples of value-added promotions include:
- Free in-store pickup
- Free consultations
- Extended warranties
Loyalty marketing
Loyalty promotions reward repeat customers and can encourage them to spend more over time, helping brands to improve retention.
Liquid I.V. links its loyalty marketing with a referral marketing strategy. Members earn points for writing reviews, sharing videos, and following the brand on social media. Every dollar they spend earns them one point—the equivalent of 1¢—that they can cash in on future purchases.
Sales promotion strategies
Here are three sales promotion strategies:
Push strategy
Showcasing your product in a high-visibility spot to capture customer attention is a push strategy. Point-of-purchase displays, such as the snacks at a grocery store checkout, aim to trigger impulse buys.
Pull strategy
Retailers use pull strategies to build demand. Advertising campaigns, giveaways, and seasonal discounts are all tactics intended to create interest and draw customers to your brand.
Tip: Use Shopify Messaging to create, send, and track branded email promotional campaigns within Shopify, no coding experience required.
Hybrid strategy
Hybrid strategies combine push and pull tactics to reach customers in all stages of the marketing funnel.
How to plan an effective sales promotion
Here are some tips for including sales promotions in your marketing plan:
Set a single measurable objective
Anchor your sales promotion around a single objective, whether that’s:
- Revenue growth
- Unit volume or inventory clearing
- New customer acquisition
- Customer win-back
For example, you might promote BOGO offers to clear out aging inventory, or offer free shipping or extended warranties to ease sales objections and attract new, high-value customers.
Choose timing and duration
Repeated discounting trains customers to wait for promotions, so be selective about flash sales. Consider, for example, celebrating brand anniversaries, weather-triggered events, or seasonal promotions instead of regularly discounting your entire product assortment.
Promotions timing varies by campaign, but in general, it should:
- Give shoppers enough time to notice
- Be relevant to its milestone (season, anniversary, etc.)
- Preserve a sense of urgency
Tip: Schedule changes to your website with the free Launchpad app for Shopify. Design banners and website copy to promote your sales promotion, then deploy them as soon as the sale begins.
Pick channels and keep messaging consistent
Use consistent messaging across channels (unless your promotion is intentionally channel-exclusive, e.g., online only). If customers browse your website, see a 20% off flash sale, and head to your brick-and-mortar store only to find it’s an online-only sale, this creates a negative customer experience.
Unified commerce platforms prevent this by bringing sales channels—ecommerce, retail, SMS, email, and social—into a single infrastructure. Inventory data and promotions are recorded in a single source of truth, and shoppers see consistent messaging across channels.
Protect margins
If you use discounts or free products as part of your sales promotion strategy, consider these best practices:
- Set a floor price. Never let a discount stack (e.g., a loyalty code and free shipping) bring a product below its breakeven point.
- Exclude low-margin/core SKUs. Protect evergreen bestsellers. If a product consistently sells out at full price, exclude it from the sale. Use the promotion to lift the rest of the catalog.
- Cap redemptions. Use scarcity marketing tactics or promotional caps, such as “Limited to the first 500 customers,” to create urgency and hard-cap your total promotional spend.
How to measure sales promotion performance
Determine whether your sales promotion is meeting its goal with these performance reports:
Redemption rate and conversion rate
Redemption rate—the percentage of issued offers redeemed—indicates how compelling your promotion is. If your email open rate is high but redemption is low, the offer may not be motivating enough.
Conversion rate—the percentage of people who complete a purchase—shows whether the promotion actually drives sales. A high redemption rate with a low conversion rate can point to friction later in the buying journey, such as unexpected shipping costs, limited inventory, or a slow checkout experience.
For example, if 1,000 offers are redeemed but only 200 purchases come out of those redemptions, the redemption rate is strong, but the conversion rate is low. That suggests the offer piqued people’s interest, but something in the shopping experience prevented more sales.
Incremental lift vs. baseline
This comparison shows whether the promotion created new sales or brought purchases forward, i.e., moved future sales that would’ve happened anyway into the promo period.
Compare revenue during the promotion against a pre-promo window or the same period last year. If revenue spikes during the sale but then drops below average the following week, the promotion may have cannibalized later full-priced sales.
Gross margin impact
This metric shows whether your promotion was profitable. Use Shopify’s gross profit by product variant report to compare your margin during the promotion with your usual margin.
If your margin held steady or improved while sales increased, the promotion likely drove more revenue without hurting profitability.
Repeat purchase and customer retention check
A sales promotion that attracts new customers who never buy again can be a net loss.
Use cohort analysis to see whether the customers you acquired through the promo become repeat buyers. Compare their repeat purchase rate, average order value, and lifetime value with those of other cohorts to determine if the promotion attracted lasting customers or one-time buyers.
Sales promotion ideas
Here are a few ideas to get you started:
Offer free samples
The best way to get your product in customers’ hands is to give it to them for free, if you’re confident they’ll like it (and are ready to get some feedback). You can give free samples of your store, on your ecommerce website, or even at pop-ups, as Jimmy’s Iced Coffee did at a pop-up event in late 2025:
Run social media giveaways
Social media is the perfect place to organize giveaways in return for engagement. You could partner with an influencer or complementary brand to extend the reach of your social media promotion. Have participants follow your brand, tag a friend, like the post, or share it to their own Stories to enter.
Give out referral bonuses
Offer bonuses to customers who refer you to other potential customers. This is simple enough on most ecommerce platforms through referral apps.
Bike transmission retailer WheelTop, for example, allows customers to earn 4% cashback by sharing their unique referral link with friends. When friends purchase through the link, they receive a 3% discount, and the referrer earns a 4% commission if the purchase is retained for 45 days without returns or refunds.
Try cashback promotions
Cashback promotions reward loyal customers with store credit for spending their hard-earned money at your store. Shoppers can combine the cash they get back with coupons, promo codes, and deals to maximize their savings.
Create a loyalty rewards program
Rewards in a loyalty program can work wonders for repeat purchases of food, drink, household, or cosmetic items.
BYLT’s rewards program allows members to earn points on purchases and various activities, which can be redeemed for discounts and free products. The program has two tiers—Free and B+—with increasing benefits based on annual spend.
Free members earn 10% off their first purchase and 5% store credit on all future orders. Those who subscribe to B+ for $49 per year get 20% off their first order, 10% store credit on subsequent purchases, and free shipping. They’re also eligible for early drop access and member events.
Organize seasonal promotions
As well as the meteorological seasons, there are cultural and religious holidays, international celebration days, and fun pop-culture events (such as May 4th: Star Wars Day). Stick to those that your target audience will celebrate to avoid over-discounting and conditioning shoppers to expect year-round discounts.
Sales promotion example
Consider Sarah, the owner of a fictional bookstore and café in a suburban area. As BCFM approaches, she’s excited but nervous. Last year, the jump in online orders overwhelmed her as she struggled to keep track of inventory between her physical store and website.
This year, for BFCM, Sarah is running a “Reader’s Delight” promotion. For 48 hours only, all books are 30% off, and every customer gets a free hot chocolate with an in-store purchase.
As customers stream in on Friday morning, Sarah’s staff uses tablets with Shopify POS to check out customers in the aisles, keeping lines short. The system automatically applies the 30% discount, and staff can easily add the free hot chocolate to each order.
Meanwhile, online orders start pouring in. Thanks to Shopify POS’s unified inventory system, Sarah can see real-time stock levels across both channels. When The Midnight Library sells out online, the system automatically shows in-store availability, allowing online customers to reserve for in-store pickup.
By Saturday afternoon, Sarah notices books in the “Cheeky Mystery” category flying off the shelves. Using Shopify POS’s discount tools, she quickly creates a flash sale for this collection that applies instantly both in-store and online.
On Cyber Monday, Sarah launches exclusive online deals. However, many customers still visit the store. Using Shopify POS, her staff can easily place online orders for VIP customers so they don’t miss out on web-only discounts.
Shopify’s unified POS system helped Sarah provide a seamless shopping experience, whether customers shopped online, in-store, or both. Real-time inventory management, flexible checkout options, and omnichannel promotions helped her business maximize sales (and minimize stress) during the year’s busiest shopping weekend.
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Sales promotion FAQ
What do you mean by sales promotion?
Sales promotions are marketing techniques used to stimulate consumer demand for products or services. They can include price discounts, coupons, contests, samples, or any other incentives that encourage people to buy. Brands may also use sales promotions to cultivate brand awareness or brand loyalty.
What is an example of a sales promotion?
Examples of a sales promotion include offering a percentage discount off products for a limited time, a buy one, get one (BOGO) offer, or a free gift with purchase.
What role do sales promotions play in marketing?
A sales promotion campaign plays an important role in marketing by helping to drive sales and build customer loyalty. It can attract new customers, retain existing customers, introduce new products, and reward loyal customers. Sales promotions can also increase the visibility of a product or service, create a sense of urgency or excitement, and reduce the risk of purchase. They can also build brand awareness and improve overall customer experience.
