‘You want to play defense’: Amid economic pressure, brands usher in Black Friday by trimming deals

Black Friday and Cyber Monday are big moneymakers for brands, and companies are feeling extra pressure to squeeze the most they can out of every sale in today’s economic environment. For months, brands have grappled with higher costs of goods, changes to their supply chains and low consumer confidence. Retail executives know that shoppers expect promotions for Cyber Week, but they also want to ensure their balance sheets are strong going into 2026. As a result, brands are more closely scrutinizing their “promo math” this year and calculating deals based on how much risk they’re comfortable taking.

“There’s been a lot of uncertainty, … and whenever that happens, from the business standpoint, cash is key,” Aaron Luo, co-founder of Caraa and Mercado Famous, told Modern Retail. “You want to play defense. You want to be very careful playing offense, in terms of aggressively going after sales and revenue.”

This isn’t to say there will be a deal drought across categories. Companies including Bombas, Dick’s Sporting Goods and Madewell have already rolled out early Black Friday deals. And some retail players, like Essentia Organic Mattress and wellness patch brand Natpat, have kept discounts the same as last year. The National Retail Federation also expects customers to spend a record $1 trillion this holiday season — although that could stem from higher price tags, rather than sales volume.

Even so, shoppers are realistic. A Gartner survey back in August found that 40% of respondents expected to see fewer discounts during the holidays. “People are being very price-conscious and expect to see higher prices, as well,” Brad Jashinsky, director analyst at Gartner, told Modern Retail.

All of this exemplifies a sort of paradox, said Ragini Bhalla, head of brand at Creditsafe, which conducts credit checks for businesses. “Consumers need promotions to spend, but retailers can’t afford deep markdowns amid thinner inventories and tariff-inflated costs,” she said. “If the expected pullback in discounts materializes, the lever that fuels holiday sales may disappear, just when shoppers are waiting for it.”

A switch in strategy

Petite Plume, which launched in 2015, sells pajamas that families tend to buy for holiday photo shoots. The brand’s Cyber Week sales run from Nov. 17 through Dec. 1, with a special donation pledge and 10% off sale for Giving Tuesday.

For years, Petite Plume offered 20% off for Black Friday and Cyber Monday. Last year, it switched this to 25%, “because we felt like it would be a more compelling offer,” CMO Fanny Quehe said. But the brand didn’t see “a substantial enough lift,” she explained.

“The demand curve simply didn’t move enough to justify the additional discount,” Quehe told Modern Retail. “That told us something important about our customer: They’re coming to Petite Plume for the product and the tradition, not just the size of the discount.”

The decision to return to 20% off, she said, is partially about larger economic pressures, including tariffs. The brand has dealt with duties when importing materials, like Peruvian Pima cotton. But Petite Plume also decided to go down to 20% to “maintain a healthy, sustainable business, so we can keep doing what our customers value: investing in premium fabrics, while considered design, responsible manufacturing and the service level they expect,” Quehe explained. Petite Plume posted 250% year-over-year growth in August, per the company.

For Caraa and Mercado Famous, Black Friday and Cyber Monday have “consistently been one of our strongest campaigns,” Luo said. The brands — which launched in 2015 and 2018, respectively — rarely run promotions throughout the year, so customers tend to stock up during the holiday sales event. This year’s Cyber Week sales began Nov. 21.

Giving 25% off during Cyber Week has always been “the gold standard,” Luo said. But Caraa and Mercado Famous diverted from that last year, going up to 30%. This year, the companies are going back down to 25%. Caraa and Mercado Famous were able to load up on holiday inventory by the end of the summer and are now in a good position to meet demand, Luo said. “What that translated to is: We don’t need to discount as heavily as we thought we needed to,” he explained.

Tariffs have been a big challenge this year, as Mercado Famous sources meats from Spain, and Caraa uses leather from Italy. Neither brand is venture-backed, so healthy margins take priority over revenue, “to a certain extent,” Luo said. “Knowing that tariffs are here to stay, we want to protect our margins a little bit better,” he added. Customers have been understanding, Luo said, considering that both brands have kept prices steady throughout 2025.

Doing the math

Figuring out how much to discount a product for Cyber Week can be a complex game.

For one, there’s the economic backdrop to contend with. Right now, brands are dealing with “a perfect storm” of tariff uncertainty, elevated borrowing costs, higher input and freight expenses, and a cooling labor market, Creditsafe’s Bhalla said. Companies may also have thinner inventories than usual after scaling back orders earlier in the year. Put all of this together, and “the appetite for deep discounting simply isn’t there,” Bhalla said.

Companies are also trying to meet multiple expectations for Cyber Week deals. Customers may have different priorities during Black Friday and Cyber Monday, whether that’s free shipping, discounts, cash back, extra loyalty points or a gift with purchase. Trust is also paramount; recent research from Power Digital found that more than one in five shoppers (20.7%) stopped buying from a brand over “misleading” Cyber Week offers. Meanwhile, more than one in 10 shoppers (10.6%) abandoned brands they felt had been “cheapened” by overly-aggressive markdowns.

All of this makes for “a very narrow lane for retailers to operate in,” Bhalla said. “When discounts shrink, consumers may hesitate, but when brands go too deep, they risk eroding long-term loyalty,” she told Modern Retail. What’s more, if shoppers don’t like the price of a product — and don’t purchase it — brands can be stuck with too much inventory. In actuality, “brands trying to protect margins in Q4 may inadvertently hurt liquidity heading into Q1,” Bhalla said.

This conundrum has been a source of discussion at CommerceIQ, an AI software platform that retail companies like Colgate and Nestlé use to manage their e-commerce sales and media performance. CommerceIQ’s 2,200 brands use its tools to see how they compare with competitors on market share, pricing, discounts, retail media spend and other metrics.

CommerceIQ has found that, heading into Cyber Week, brands are poised to offer less steep discounts, based on the current economic landscape. “Our prediction right now is that brands are going to taper their discounting strategy,” the company’s vp of product marketing, Bill Schneider, told Modern Retail.

To inform this, CommerceIQ is drawing on recent data from its brands in sectors like grocery and beauty. In the third quarter, CommerceIQ tracked that prices were up 3.7% year over year, but discounts were down 1.7% year over year. Ad spend was up 22% year over year. Put together, what this data means is that “retailers are trying to modulate these rising costs, while maintaining demand,” Schneider said.

Even with ongoing challenges, brands who spoke with Modern Retail leading up to Cyber Week say they’re optimistic about the holiday season.

“We’re super excited for Cyber Week; it’s become one of the most important weeks in the retail calendar,” Emily Bromfield, svp of global marketing at Mac Cosmetics, told Modern Retail. Mac offered 30% off site-wide last year, and it will be holding similar deals this year, Bromfield said. However, livestreaming will play a big role in its strategy this season, as the brand joined TikTok Shop a few months ago.

Meanwhile, Petite Plume’s Quehe said that the holidays “are our Super Bowl.” “It’s obviously a huge acquisition window — our biggest of the year — but it’s also where we see our repeat customer come back year after year,” she explained. “In the fourth quarter, we start selling a pair of pajamas every 20 seconds.”