With Black Friday on the horizon, brands face intense pressure to cut prices. But just because everyone else is doing it doesn’t mean you should. Saying “no” to discounts might be one of the smartest moves you can make. Here’s why.
1. Discounts Damage Your Brand Image
Building a brand isn’t easy, and part of what differentiates it is the higher perceived value. Discounting puts that hard-earned perception at risk. High-end brands, in particular, are built on their quality and exclusivity. Customers expect to pay more because they trust it’s worth it. Cutting prices might satisfy some shoppers, but it can alienate your loyal base, who may turn to competitors that still feel exclusive.
2. They Erode Your Profit Margin
Discounting eats into your profit margin, which is already a tightrope for most businesses. With every discounted sale, your resources for reinvestment in brand marketing shrink, making it harder to stay top of mind with consumers. For some brands, excessive discounting can even lead to existential risk, eventually forcing cost cuts, layoffs or even closure.
3. Consumers Will Stockpile
Promotions can lead to short-term volume boosts, they often mean future sales decline. Consumers are likely to stockpile during promotions—especially for non-perishable goods—and then delay purchases until the next sale. The result? Little to no actual increase in long-term sales volume.
4. DISCOUNTS Don’t Drive Meaningful Trial
While promotions may attract some new buyers, these are often customers already familiar with your brand. They buy on discount because they already know it’s a good deal. New buyers drawn in by price alone are typically not brand-loyal and will likely move on to the next promotion from a competitor.
5. DISCOUNTS Are Easy to Copy
Once your brand dives into price promotions, others will follow. Any competitive advantage you gain is temporary. After your promotion ends, consumers simply switch to the next brand on sale, creating an ongoing cycle of promotions.
6. DISCOUNTS Tend to Escalate
The more brands discount, the more aggressive promotions become. “Buy one, get one half price ” becomes “buy one, get one free,” and so on. As deals escalate, margins erode further, brand equity suffers, and the credibility you’ve built with your customers weakens.
7. The Whole Category Can Become Commoditised
When everyone competes on price, brands lose differentiation. Consumers learn to buy by deal, not by brand. This is great for bargain hunters, but over time, it favours low-cost options and own-label alternatives, which will always undercut you on price. Discounting devalues the entire category.
Summary
It’s tempting to join in on the discount bandwagon. A quick boost in sales can feel good in the moment, but in the words of Talking Heads, you’re ‘on the road to nowhere.’ While price promotion is the most directly measurable of the 4Ps, it’s also the one that can be most damaging.
The bottom line? Make sure your brand is worth the price you charge and avoid the allure of Black Friday. Consider the stance of outdoor retailer REI Co-op, which famously refuses to participate. It may be the best way to protect the value of your brand.