D2C growth through discounting - when it works, when it hurts, and what to try first.

Image Source: DeckLinks Discounting has quietly become the default growth lever for D2C brands. Even those who once said they would never discount have eventually given in, with sales framed as rare or one-time-only. 

In my conversations with founders across beauty, fashion and lifestyle, this question keeps coming up: How do you grow without constantly dropping prices?

Cutting prices can feel like the fastest way to increase sales, but once customers get used to paying less, raising prices later becomes almost impossible.

If your long-term goal is stronger margins and healthier unit economics, there are better growth levers worth testing before touching the price tag. But before we explore those, let us look at both sides of discounting and understand when it helps and when it hurts growth. When discounting hurts growth 

• Margins shrink faster than revenue grows: Even if topline increases, contribution margin drops because discounts rarely reduce CAC.

• Customers are trained to wait for sales: Full-price purchases slow down and demand becomes unpredictable.

• The brand feels less premium: Customers start viewing the product as a deal instead of something worth paying full value for.

• You attract low-intent buyers: Bargain hunters convert quickly but rarely stick around or contribute meaningfully to LTV.

These are the hidden costs that creep in when discounts become the default growth lever.

When discounting actually makes sense 

Discounting itself is not the problem. When used with intention, it can support growth in the right contexts. Here are a few examples: 

• To clear slow-moving or seasonal inventory: Protects cash flow and frees up resources for better-selling products.

• Reduce trial friction for first-time customers: Especially useful in categories where experience drives adoption.

• Accelerate growth in replenishable categories: A one-time loss is acceptable if LTV makes up for it later.

• Reward or reactivate a high-value segment: Targeted offers that build loyalty rather than price dependency.

• Boost demand during predictable seasonal spikes: This is a great strategy when your baseline is already healthy. For example, if your everyday sales are stable and a Diwali or Black Friday offer brings in an incremental lift on top of your usual revenue, that reflects healthy seasonal demand.
  

A recent example 

We recently led a Black Friday campaign for one of our partner brands and saw an amazing spike over BAU. I’ve read a few other marketers talk about their wins, too.

Here are a few things that stood out while running the campaign & reading everyone else’s stories:

Better growth levers to try before touching your price tag:

Before lowering prices, strengthen the value customers experience when they shop with you. These levers improve conversion, increase average order value, and build loyalty, without compromising your margins:

• Fix the funnel first 

If the buying experience is broken, a discount will not fix it. Audit product pages, review placement, search functionality, and checkout flow to remove friction that stops people from buying. 

• Test price sensitivity 

Before running a sale, run small experiments to understand whether price is actually the blocker. A simple A/B test can reveal if customers are responding to price or friction elsewhere in the funnel. 

• Enable guided selling and real-time support 

Quizzes, fit finders, and routine builders reduce decision fatigue. Live chat, click to call or short consultations convert hesitant buyers without touching price. 

• Add value to increase AOV 

A higher AOV is often more powerful than a temporary spike in conversion. If your CAC stays the same, increasing revenue per order improves your bottom line immediately. 

Offer free shipping over a minimum order value, build bundles, and give customers more for what they pay through gifts. 

• Build loyalty or referral loops 

Reward customers who return and those who spread the word. A repeat buyer is your most profitable sale, and referrals increase both trust and conversion among new customers. 

• Use targeted offers 

Discounts should not be a blanket push. Segment by intent and behaviour so you preserve value for full price shoppers and only incentivise customers who genuinely need the nudge. 

• Create urgency 

Seasonal capsules or limited edition bundles create excitement without lowering the price. This works especially well for brands with strong storytelling and drops that feel collectible. 

• Reinforce brand value 

Help customers understand what makes your product worth paying full price for. When value and quality are communicated clearly, pricing feels justified instead of expensive. 

• Offer flexible payments 

Pay in three, EMIs, or pay later options reduce hesitation in high consideration categories. The price does not change, but the perceived barrier to purchase does. 

• Create a membership or access programme 

Early access, exclusive products, and perks add value without lowering price. A good membership programme builds loyalty and predictable revenue. 

• Track the right outcomes 

Measure success by contribution margin, repeat purchase, and CAC recovery. Revenue spikes are misleading if customers do not come back at full price. 

To conclude, discounts can be a strong growth lever when they serve a clear purpose, but an over-reliance on them chips away at both profitability and brand perception. 

Before lowering prices, test a few of the levers above and track what happens. If conversion lifts without sacrificing margin, you are growing in the right direction. Customers will pay full price for a product they trust, a buying experience that feels seamless, and a brand that stands for something. 

If you need help testing any of these levers and making sense of the data, reach out to me at meet@thebuildinc.com. It’s what I love doing, so you can expect a quick response from me!