The Paradox of Promotions

Stores launch discounts and deals when business is bad.  Customers respond by buying product(s) they normally would’ve passed up.

Discounts work in the short-term but in the long-term may distort customer perception of product quality.  Hitting the right price that meets demand is a challenge for any retailer.  Paradoxically, “out of stock” can also be a strategy that generates sales.  Popularity plus scarcity stimulates demand.

Brands have to tread carefully in running promotions.  Guessing the customer mindset across casual and passionate buyers without sacrificing product quality is ultimately a marketing game.