In eCommerce, discounting products is one of the fastest ways to drive a spike in sales – but without a clear strategy, you risk eroding your margins.
Running a profitable promotion requires careful planning. Choosing the right discounting strategy, setting it up correctly in Google Ads, and using AI tools to create smarter, more targeted promotions will all help maximise results, protect your brand image, and boost your revenue.
At Create8, our eCommerce team helps brands attract more clicks and conversions through smart discounting strategies and high-performing ad campaigns. In this article, we explain how to create impactful and profitable eCommerce promotions for your store in 2026.
The psychology of discounting
Understanding the psychology of pricing will help you present your store discounts in the most impactful way, making deals look more attractive to customers without lowering the price further.
The ‘Rule of 100’
Can’t decide whether to offer customers a percentage discount or a fixed amount off? Let the ‘Rule of 100’ guide your decision. This simple rule states:
- For products priced under £100, you should advertise a percentage off, e.g. 20% off (20% off a £50 shirt sounds better than £10 off)
- And for products priced over £100, use pounds-off, e.g., £50 off (£500 off a £2,000 laptop sounds better than 25% off)
Vertical subtraction
Another small tweak that can make a big difference is the way you display discounted prices. Always stack the original and sale prices vertically (one above the other), not horizontally, because the brain processes vertical subtraction faster.
Subtle changes can make customers perceive the discount as better value, without you having to drop the price further and risk your margins.
Four discounting strategies and how to set them up in Google Ads
Discounting products can help boost sales, but it’s important to choose the right strategy to protect your margins.
Before discounting items, make sure you determine what your goal is and review your profit margins, customer behaviour, and current market conditions to help you choose the right strategy. Your product type and inventory levels should also play a role in determining what and how you discount.
Here are the top four discounting strategies and advice on how to set them up correctly within Google Ads.
Strategy 1: The Hard Markdown
The hard markdown is the simplest type of discounting strategy, but it can damage your margins if used on the wrong products or at the wrong time. During a hard markdown, the price of a product is permanently lowered.
When to use this strategy
This type of discount is best used when you need to clear dead stock or end-of-season or discontinued lines that are otherwise tying up cash or storage space, making it more cost-effective to get rid of them.
Marking down products in Google Ads
In Google Ads, products that have been marked down appear with strikethrough pricing. The user sees the old price crossed out and a ‘Sale’ badge in the top left corner of the Shopping Card.
Google Ads setup:
Setting up a price markdown in Google Ads is easy; all you need to do is put the product’s original price in the ‘price’ field and the new discounted price in the ‘sale price’ field.
Important note – Google has a 30-day rule for products that are marked down to ensure that the discount is genuine. It will only show the strikethrough price if the original price was stable for at least 30 of the last 200 days.
For more Google Ads troubleshooting, read our blog: Why your Shopify Google Ads aren’t performing (and how to fix them).
Strategy 2: Discount Codes
The discount code strategy works very differently from the hard markdown strategy. Rather than lowering the price on specific products, you offer customers a discount code that they then have to actively apply at checkout. Discount codes can be available to anyone or customer segments (i.e. new customers). They are usually only valid for certain products or when customers spend over a certain amount.
When to use this strategy
The discount code strategy is great for attracting new customers and incentivising them to make their first purchase. Alternatively, it can be used to reward specific customer segments to improve customer satisfaction and build brand loyalty.
Discount codes in Google Ads
If a discount code is available, a link promoting it will appear at the bottom of the Shopping Ad, i.e. ‘Get 20% off with code SAVE20’.
Google Ads setup
When setting up a discount code, rather than changing the price in your product feed, you need to create a promotion in the Google Merchant Centre.
Visit the Merchant Centre > Marketing > Promotions > + New Promotion. Then, select the type of promotion you want to create – this could be a percentage off or a fixed amount off. Now fill out key information about the discount, the code (i.e. SAVE20), which products it can be applied to, and the start and end dates of the promotion.
Strategy 3: Bundle Discounts
The bundle strategy is less about cutting the price and more about encouraging customers to make savings by spending more. An example of a bundle discount is ‘Buy 2 t-shirts and get 50% off a third one’.
When to use this strategy
Most stores use this strategy when their goal is to protect their margins and increase average order value. If you have slow-moving products that naturally go together, this strategy can help to shift them without applying a heavy discount.
Bundle deals in Google Ads
If it’s set up correctly, the bundle deal should show as its own separate listing in Google Shopping, featuring the discounted bundle price. It will be labelled as a set, kit, or bundle, helping your listing to stand out and avoiding like-for-like competitor price comparisons.
Google Ads set up
If you want the bundle to have its own product listing on Google Ads, you can’t just rely on an app that creates product bundles; you need to manually set it up with its own product listing on your website.
In your store, create a new product, i.e. ‘Tshirt and Shorts Bundle’ and assign it the discounted bundle price. This will automatically be pulled into your Google Shopping feed, creating a new unique ID for your bundle.
Strategy 4: Tiered Discounts
Similar to bundle discounts, the idea behind tiered discounts is that the more the customer spends, the bigger the discount they receive, but rather than bundling specific products together, customers are free to buy what they want. For example, ‘Spend £40 to get 10% off, £75 to get 15% off, or £120 to get 25% off’.
When to use this strategy
Tiered discounts are a good option when your goal is to increase average order value, as they reward customers for spending more. This kind of strategy is particularly popular in industries like fashion, beauty, and groceries.
Tiered discounts in Google Ads
When set up correctly, tiered discounts are promoted in Google Ads with an extra line of text that says something like ‘Spend £150, get £30 off’.
Google Ads set up
Tiered discounts should be set up as promotions in Google Merchant Centre; you don’t need to change anything in your product listings.
Visit Google Merchant Centre > Marketing > Promotions > + New Promotion. Then, select the type of promotion you want to create – this could be a percentage off or a fixed amount off. Next, define the threshold for the offer by setting a minimum spend (i.e. £50) and a reward (i.e. £5 off) and apply it to the products you want to include in the offer; this could be all products or specific product categories.
Using Google Ads Promotion Assets to highlight store discounts in Search Ads
Google Ads Promotion Assets (formerly called Promotion Extensions) can be used to give your discounts more visibility by promoting them within Google Search Ads. They appear as an extra line of clickable text displayed under your ad, featuring a small price tag icon and a line of text that says something like ‘30% off everything – Black Friday Sale’.
Highlighting your offers directly in search results can help your ads to stand out, attract more attention, and significantly increase click-through rates.
Setting up Promotion Assets in Google Ads
To set up Promotion Assets, visit Google Ads > Campaigns > Assets > Promotion, then create a new promotion. Fill out important information about the promotion, including the discount amount and the dates during which the promotion will run. You can then schedule the promotion to switch on automatically when your sale starts.
Running smart discounts in the agentic era
In 2026, many eCommerce businesses are moving away from storewide discounts and using AI tools like Shopify’s Sidekick to help them create smarter, targeted discounts that increase conversions without damaging margins.
Using Shopify Sidekick to create targeted discounts
Sidekick is Shopify’s digital AI assistant. If you’re not yet using it to automate your eCommerce operations and analyse store data, read our blog Shopify Sidekick AI Review: What is it and what can it do? to learn more about how to use it to boost your store’s performance and operational efficiency.
Sidekick can help merchants create highly effective targeted discounts by quickly analysing store and customer data to identify people who are showing a high interest in products but haven’t yet converted. Merchants can then send these people a discount code to help nudge them towards conversion.
An example Sidekick prompt could be: “Create a segment of customers who viewed ‘leather jacket’ twice in the last week but didn’t buy.”
Sidekick then creates a list of relevant customers for you to send a discount code to.
Partner with Create8 to start running more profitable eCommerce promotions
Want to start getting more from your store discounts without sacrificing margin? Our team of eCommerce and Google Ads experts are here to help you plan, optimise, and execute smarter and more profitable eCommerce promotions.
Contact us today by calling 0161 820 9686 or emailing hello@create8.co.uk.
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