I've been thinking about this a lot recently, and I'd love to hear your thoughts. I work on the tech side but am moving into marketing and finance too.
Discounting in e-commerce is super common, especially in fashion, but really all over the place. I know that premium brands generally avoid discounting because it devalues the customers' perception of value, but regardless, it's still done. So for those brands that do discount, how do you know if it's working?
Generally speaking, bigger discounts = more sales. But bigger discounts = less margin. How do you manage the tradeoff?
I've worked with some online stores that discount , and they chose to collect really detailed data on the discount promotions. With those data, they could see which discounts were working for various segments etc. But if you're not collecting data at high granularity, doesn't that mean you're just taking an average across your whole customer base and potentially losing margin and losing brand value for no reason?
What do you think?