How brands are navigating ‘deal fatigue’ amid a blur of bargains

Amazon’s sales event, dubbed Prime Big Deal Days, is slated to run from Oct. 8 through Oct. 9., and other retailers are piling in to join the sales bonanza. Target has announced the return of Circle Week from Oct. 6 through Oct. 12. Meanwhile, Best Buy’s fall savings schedule is already underway, spanning from Sept. 27 to Oct. 25. And, of course, there’s Walmart, which will host its holiday deals event online and in-store from Oct. 8 through Oct. 13 — up from four to six days from last year.

From July 4 until the end of the year, the intervening months are a blur of bargains, and it’s taking a toll on merchants who are feeling increasingly pressured by something called “deal fatigue.” Budgets are being squeezed in order to pay for discounts across multiple marketplaces. It’s also attracting a type of customer who’s more loyal to price than the brand itself. But brands are finding new ways to stand out to customers in a sea of look-a-like coupon codes and interchangeable sales events, from membership-only perks and marketplace-exclusive products to tiered discounts and even pulling back on discounts. 

“I think it’s too much. It’s training the consumer not to buy unless there’s a deal, which I don’t think is good,” said Craig Leslie, founder of The Bean Coffee Company. “While deals can drive eyeballs and drive conversion, I definitely think there’s fatigue from a brand standpoint.”

Historically, brands’ holiday strategies have orbited around three major tentpole occasions: Black Friday, Cyber Monday and last-minute gift-giving in December. But an early start to the holiday season has become the new normal as consumer behavior shifts, a lingering effect from the pandemic when bottlenecks in the world’s supply chain led to shipping delays. Amazon’s Prime Day sales events, now both in July and October, have also driven demand throughout the year and pulled forward seasonal sales. While Amazon’s summer Prime Day has been around since 2015, the company introduced an October Prime Day in 2022. For specialty brands like The Bean Coffee Company, there are even random holiday sales to keep in mind, like during National Coffee Month.

It doesn’t help that there’s been an explosion of new online marketplaces in the last few years as everyone from big-box retailers like Target and Walmart to specialty retailers like Nordstrom and Michael’s launches their own marketplace to compete with Amazon’s sprawling web store. Not to mention there’s heightened competition from emerging marketplaces like TikTok Shop, Shein and Temu, which are able to offer rock-bottom prices on everything from jeans to AirPod dupes, driving prices down even more. 

To Leslie, it’s all become something of a paradox of choice. “It feels like there’s a deal every day of the week, and brands aren’t able to participate in everything,” Leslie said. 

‘Racing against the clock’

The explosion of sales eats up more time for brand founders like Leslie, who have to dedicate extra hours to making sure they’re prepared ahead of each promotion. 

“From a bandwidth standpoint, it’s a lot because you’re scheduling the deals, and then you’re creating production scheduling — and then you have to inbound inventory,” said Leslie. “You’re kind of racing against the clock.” Brands don’t always know when exactly the deals will be announced, either, which makes things like predicting inventory “a bit of a guessing game,” Leslie added. 

For Amazon merchants who run competing discounts on other marketplaces, they need to make sure their prices aren’t lower than what’s advertised on Amazon, or they can risk being penalized by the company’s pricing algorithms. In the lead-up to Prime Day this July, some sellers said their products were suppressed after Amazon’s algorithms found their items being sold for less on Target’s online marketplace, per CNBC. 

The growth of discount culture has put extra pressure on luxury or premium brands that are less inclined to offer sales, according to Katya Constantine, founder of the agency DigishopGirl Media. “It’s becoming tougher to be a brand that offers products at full price,” said Constantine. “We are expecting this season to be highly promotional.”

It’s even ballooning brands’ budgets to fund the uptick in discounts, according to Danielle Waller, global chief media officer at marketplace consultancy Podean, which works with brands like Under Armour, E.l.f. and Danone. 

“Budgets are going to have to go up to fund some of this activity, so the ability to be on these marketplaces is more expensive than it was last year,” said Waller, who added that baseline budgets are up between 10% to 20% just to keep up with the inflation of advertising costs alone. The pressure to subsidize discounts for price-conscious shoppers squeezes those budgets even more. 

As such, the uptick in advertising costs is challenging brands’ ability to even offer discounts, according to Eric Farmer, CEO of the digital marketing agency Wallaroo Media. “The discount fatigue is real, and I think it’s not something that a lot of brands want to do, but instead, they’ve been feeling forced to discount more,” Farmer said. “On the flip side of that, they can’t really because advertising costs have gone up higher this year than maybe ever before.”

Keeping it fresh

Brands are navigating deal fatigue in a few ways. 

For one, they’re mixing up their pricing and promotional strategies throughout the holiday season. Brands will change up which sections of their product catalog will be discounted, depending on the sales event, said Waller, though this tends to be more beneficial for brands that have an array of products to choose from. 

Brands are also brainstorming beyond straightforward discounts and coupons, Constantine said. This might take the form of tiered discounts, so customers receive larger discounts based on how much they spend. For example, apparel retailer Mango is currently offering customers 30% off if they spend at least $199.

And brands are adding gifts to purchases to keep customers interested in sales throughout the holiday season. Having a varied approach to promotions helps ensure that deal events earlier in the season, like Prime Big Deal Days, won’t cannibalize sales from key occasions like Cyber Monday and Black Friday, Constantine said.

Collagen brand Obvi is moving away from discounts and coupons. “We actually have created a rule that we don’t go above 25% because of the diminishing returns; it just isn’t as effective as it used to be, say, two years ago,” said Ronak Shah, the company’s CEO and co-founder. In a retail landscape where coupons are on every corner of the Internet, discounting attracts shoppers who aren’t loyal to the brand, he added. 

Instead, the company has looked to add value to its products in other ways, from loyalty points that go towards future purchases as well as free swag like coffee and ebooks. Shah said the brand attracts customers by offering a lifestyle community that includes access to blog posts, recipes and early product drops.

Brands are increasingly differentiating their Black Friday and Cyber Monday strategies by offering products and sets that customers can only buy from a particular marketplace, such as Walmart or Amazon, according to Alexandra Carmody, vp of brand strategy at e-commerce accelerator Front Row. Carmody said that strategy has been successful for brands in part because it also helps them figure out what makes a shopper of a particular marketplace tick.

Despite the deluge of promotions and deals across marketplaces now, there’s one sales event that brands aren’t giving up, and that’s Prime Day, according to Phil Masiello, founder of powdered superfood brand Uplift Florae and CEO of revenue acceleration agency Crunchgrowth. 

“Brands are becoming more choosy about what deals they put out there and when,” Masiello said. “Most brands are still participating in Prime Day and Prime Big Deal Days.”