If you hate discounts, you are not using them right.
It’s easy to blame discounts for your low margins.
Discounting works. It was true 50 years ago and it will be true 50 years from now.
In fact, Coca-Cola was the first company to experiment with discount pricing strategies in the 1880s.
People love a bargain. Everyone loves getting more for their money’s worth.
And they will always want to pay less for the same stuff. That’s human psychology.
With discounts, they get a perception of saving and feel smarter about their purchases.
For brands, it’s a structural issue.
How do you use and structure deals?
Marketplaces or retailers selling other brands might be the only exceptions.
But even in that case, like Walmart or Costco, they have to solve for discounts operationally.
Like launching private labels, sourcing in bulk, or negotiating hard for a deal.
Or Amazon, which changes product prices up to 2.5 million times a day.
For marketing a DTC brand, discounting is a powerful tool.
With the right discounting you can –
Increase average order value
Use volume discounts, free shipping thresholds, or bundles to place your discounts strategically.
Increase Urgency & conversion rate
Running short (1 – 3) days deals can create urgency. Shein runs hourly sales to create that urgency.
Incentivize loyalty and repeat purchase
Using points or rewards to encourage repeat behavior.
It’s not that discounts do not have any value; it’s the way discounts are done.
— Running long sales, evergreen offers (they dilute the brand)
— Repeating the same offers every month (they make customers expect deals and kill exclusivity)
— Not including margins to cover discounts. Brands should have some margin buffer to include for discounting.
Most purchases are more psychological than rational decisions.
A smart marketer can play that psychological reasoning to it’s benefit.
Boring marketers will still run their 10% Off 🙂