For years and years, businesses have relied on discounts to drive sales. In 2026, things are no different, but many businesses are changing their approach so that they can hyper-target different demographics.
Reducing the Issue of Margin Drains
When sites release a site-wide coupon code, people can then use the code as a way to claim a discount. The issue with this is that it’s very expensive.
There’s also a good chance that customers who are on the site would have made a purchase anyway. This meant that brands were sacrificing their profit margins unnecessarily, but in this day and age, AI is helping companies to solve this issue through precision promotions.
Rather than offering the same discount to every single customer, AI-driven systems analyse data to find out the minimum incentive required to encourage someone to check out. The result is a promotional strategy that increases overall conversions while giving profit margins some protection.
When looking into modern promotions, engines work by analysing streams of data. Customer information, including browser behaviour, app engagement, purchase history, and more, all help to build solid campaigns. This is then combined with more contextual signals, including the time of day, device used, and location. Using AI to analyse inventory age and stock levels can also determine what makes the most commercial sense.
Several Sectors are Embracing this Approach
Supermarkets are a clear example here. A grocery app may recognise that someone has bought the ingredients for a pasta recipe, but not added the ingredients for a sauce. Systems can then create targeted coupons for a premium sauce brand, which increases basket value without offering a discount across the whole store.
Sainsbury’s is close to doing this right now, with their app offering Nectar prices on products that the shopper has bought in the past, rather than 10% off the whole store. Airlines and hotel chains also use AI and data as a way to identify customers who abandon their bookings before they check out.
Rather than sending out discount codes, offers to provide discounts on excursions in the area, or a limited-time discount code to complete the basket can be sent. Vue Cinemas also offers discounts on certain days of the week, rather than offering codes that run endlessly or across multiple days.
Online casinos are another sector that is very advanced with their discounts and promotions. When visiting a free daily promotions casino, new customers are often given the option to register, and when £10 is spent, 150 free spins are awarded. Sites can use different measurements to determine the optimal amount of free spins to give, but by setting specific criteria, it becomes possible to avoid site-wide discounts that result in margin drains for online businesses.
Specialist software platforms also allow businesses to automate their personalised offers, which gives a glimpse into the profitability of a campaign before it’s launched and decreases margin drain even more. By using data and by using precise promotions, brands not only stand to be more successful, but customers can also receive more personalised discounts, a key driver of loyalty in 2026.
