Walk through any major retail website right now and the pattern is familiar. Sale banners. Percentage-off messaging. Clearance sections running alongside new arrivals that are barely visible. The discount has become the dominant language of retail, online and off.
It is easy to understand why. A sale drives short-term revenue. It moves inventory. It produces a spike in the numbers that looks like momentum. And in a climate where growth feels harder to come by, the temptation to reach for a promotional mechanic is entirely rational.
But there is a growing body of evidence, and a growing number of brands, that suggests discounting as a primary growth strategy is quietly working against the very thing it is supposed to build.
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What Discounting Actually Does to Customer Behaviour
The economics of discounting are well understood at the transaction level. A 20% discount drives more orders. What is less often modelled is what it does to the customer who arrives through that discount.
Research consistently shows that customers acquired through promotional pricing have lower brand loyalty and are significantly more likely to buy only when the price is right. The pattern that emerges over time is one that many D2C founders recognise without always being able to name: revenue that only moves during sale periods, a customer base that ignores full-price communications, and a margin structure that requires ever-increasing promotional spend just to maintain baseline performance.
Behavioural economics research has a name for this: price anchoring. When a customer first encounters a brand at a discounted price, that becomes their reference point. The full price does not feel like the real price. It feels like a markup. And the brand has, in effect, trained its customer to wait.
The margin mathematics make this concrete. A 20% discount requires 25% more volume simply to break even on gross profit. Most brands never recover that volume at full price, because the customers the discount attracted were not full-price customers in the first place.
The Difference Between a Discount Customer and a Brand Customer
Loyal customers, those acquired through genuine brand affinity rather than price incentive, spend on average 67% more than casual customers over the course of their relationship with a brand. They repurchase more frequently. They are more likely to refer others. And they are significantly less sensitive to competitive pricing because their connection to the brand is not transactional.
Research into customer retention reinforces this point from a profitability perspective. A 5% increase in customer retention can boost profits by 25 to 95%, according to research originally published by Bain and Harvard Business School and widely replicated across ecommerce verticals since. The compounding effect of retaining a genuine brand customer is substantial. The value of a customer who arrived because of a discount and leaves when the next competitor runs a better one is, by comparison, minimal.
What this means in practice is that the composition of your customer base matters as much as its size. A brand with a smaller base of high-affinity customers will consistently outperform one with a larger base of discount-conditioned customers, on margin, on LTV, and on the predictability of its revenue.
What Newness Does That Discounting Cannot
The alternative to discount-led acquisition is not simply charging full price and hoping for the best. It is building a different kind of motivation to buy.
Research published in the Journal of Product Innovation Management in 2025 found that pre-release consumer anticipation for a new product creates what the authors describe as a state of enjoyable discomfort or happy hiatus, in which consumers get pleasure from wanting rather than having. This anticipatory state drives genuine purchase motivation, the kind that is not contingent on a price reduction and does not erode brand value in the process.
Brands that have made newness a strategic tool, releasing new products on a predictable cadence, creating visibility around what is coming, building the habit of checking back, are leveraging a fundamentally different purchase motivation from brands that rely on discounting. The customer who buys because they are excited about a new product is a categorically different customer from the one who buys because the price dropped.
This is visible in how some of the most successful D2C brands structure their release calendars. Regular, predictable drops of new product create a rhythm of anticipation. Customers know that something new will be available and they develop a habit of looking. The purchase is motivated by desire for the new thing, not by the relief of a price reduction. The customer who arrives through that motivation tends to be more loyal, more likely to return at full price, and more likely to advocate for the brand.
The Hidden Cost of Leading With Sale
There is a cost to leading with sale that does not appear immediately in the revenue numbers but accumulates over time in the quality of the customer base.
Emotional loyalty, defined as loyalty that is not incentive-driven, rose 26% between 2021 and 2024 and now accounts for 34% of all loyal customers, according to retention benchmark research across ecommerce verticals. That proportion matters because emotionally loyal customers are the ones who stay when the discount is not available, who buy across a brand’s range rather than cherry-picking the reduced items, and who represent the long-term margin that makes a D2C brand defensible.
A brand that leads with sale tends to attract customers whose loyalty is conditional. A brand that leads with newness, with desire, with the anticipation of something worth having at full price, tends to attract customers whose loyalty is genuine. Over a twelve-month period, the difference in the economics of those two customer bases is significant. Over three years, it can be transformational.
Discounting Has Its Place. Leading With It Does Not.
This is not an argument against discounting as a tactic. Used selectively and strategically, it serves a genuine purpose: clearing end-of-season inventory, rewarding loyal customers, creating access moments for new audiences at specific points in the year.
The problem is not the discount. It is using the discount as the primary language through which a brand speaks to prospective customers. When a brand’s most visible communication is a sale, it trains the market to wait for one. When a brand’s most visible communication is something new and desirable, it trains the market to pay attention.
The question for any D2C brand thinking about its acquisition strategy is not whether to discount. It is whether the customers the discount attracts are the customers the brand is trying to build its future around. If the answer is no, the more powerful strategy is the one that builds desire without reducing price.
Newness does that. A well-executed promotional calendar of regular drops, new arrivals, and anticipated launches builds the kind of anticipation that motivates purchase without eroding the margin or the customer quality that the brand depends on for long-term growth.
The Graygency is a performance marketing agency for D2C brands. We practise True Performance Marketing to identify micro-moments, building targeted creative for those moments, and constructing growth systems that compound over time.
Sources: Skio, The Discount Death Spiral, June 2026; Kissmetrics, Customer Lifetime Value by Acquisition Channel, 2026; Bain and Company / Harvard Business School, The Value of Keeping the Right Customers (widely cited across ecommerce retention research); Journal of Product Innovation Management, The Contagious Nature of Pre-Release Consumer Buzz, April 2025; Trypropel, Customer Retention Statistics and Benchmarks, June 2026.
