The idea is that, if the customer has an active discount code for that session (either by landing on a particular page, or entering a code somewhere), instead of just showing the discount in the basket, we show it further (earlier) up the funnel and automatically discount on the product page.

The effectiveness of this depends on the discount level, I've tested it at 30% and 50%.

With a 50% Discount:
Add to Cart rate +33%
Sales rate + 24%

With a 30% Discount:
Add to Cart rate +11.6%
Sales rate + 10.2%