Navigating Deal Fatigue: Strategies to Retain Customer Loyalty in a Discount-Driven Market

October marked a whirlwind of promotions across the retail landscape, with Amazon’s Prime Big Deal Days, Target’s Circle Week, Walmart’s holiday deals, Costco’s Member Savings Event, Best Buy’s flash sale, and Kohl’s three-day discount event. These promotional events, once limited to distinct times of the year, have now become more of a year-round expectation for shoppers, further complicating the already challenging environment for brands. With economic pressures like inflation continuing to drive price sensitivity among consumers, many brands are grappling with how to maintain their competitive edge through deals and discounts.

The Rise of Deal Fatigue

Yet, as retailers and brands offer more frequent and larger discounts, there’s a downside—deal fatigue. Many are finding that this constant pressure to offer promotions comes at a cost, both in terms of financial strain and the potential erosion of brand loyalty and perception.

In the race to capture price-sensitive shoppers, brands are scaling up their promotional efforts. However, as highlighted by Modern Retail (Sept. 30, 2024), this strategy has led some brands to experience diminishing returns. Brands are feeling the strain as they invest significant time and resources into these regular deals to keep up with competitors while seeing less payoff in the long run. Even with the holiday season approaching, some brands are cutting back on the discounts they’re offering, recognizing that too many or too large of deals can lead to longer-term issues.

The Impact of Deal Fatigue

While deals can convert shoppers quickly, they also risk creating an environment where brand loyalty is undermined. Shoppers conditioned to expect discounts may shift their allegiance to whichever brand offers the lowest price at any given time, resulting in a lack of long-term customer retention. Additionally, over-discounting can tarnish quality perceptions and overall brand equity.

What Does This Mean for Brands?

Brands need to strike a balance between offering attractive deals and ensuring they’re not inadvertently training their customers to only buy during promotions. For example, Chain Store Age (Aug. 15, 2024) points out that brands are turning to more exclusive deals—such as loyalty member discounts or offers for first responders, students, and military personnel. These targeted discounts have proven effective, with 73% of shoppers reporting they feel more emotionally connected to brands that offer exclusive deals, and 71% feeling more loyal as a result.

As brands navigate these challenges, it’s essential to develop more creative and strategic approaches that don’t exacerbate deal fatigue. Instead, brands must focus on balancing short-term wins with long-term loyalty by:

• Customizing promotions to specific segments, such as loyal customers or first-time buyers, and avoiding over-saturation of broad-based deals.
• Monitoring brand metrics closely to ensure promotions do not diminish brand equity or negatively shift consumer perceptions.
• Offering value beyond price, whether through superior customer experiences, product innovation, or supporting causes that resonate with shoppers.

These strategies allow brands to connect with their audience in more meaningful ways, moving beyond constant discounting while still addressing the financial pressures their customers face.

Standing Out Beyond Discounts: How Brands Can Build Lasting Customer Value

Across industries (CPG, retail, apparel, restaurant, etc.), brands are fighting for shoppers’ attention and dollars. This increasingly price competitive environment can make it harder for brands to stand out. Brands need to explore how else they can be providing value to their customers and showing they care, beyond price and deals, to stand out from their competition and establish a stronger relationship with their shoppers.

Learn More from C+R’s Case Studies

For further insights into how brands can navigate deal fatigue and price-sensitive shoppers, check out some of our recent case studies:

As we head into the holiday season and beyond, it’s important that brands find creative solutions to avoid deal fatigue while still addressing consumer demands by focusing on more than just price—consumers want brands that provide real value and build lasting connections.