Issue 04

Beyond 50% off: how constant discounting trains shoppers to wait

13 October 2026

Flicp Editorial

The Indian retail edit desk

Most promotions don't pay for themselves, and deep, frequent discounts lower the price shoppers expect. Why honest, limited drops create demand without cheapening a brand.

Ask a shopper in Hyderabad when they last paid full price for a pair of sneakers, and there is a good chance they'll laugh. Why would they? The festive sale is weeks away. There's a bank offer on Fridays. A cashback app shows a code for most brands they know. Full price, for a lot of products, has become a number printed on the tag that nobody actually pays.

Brands built that habit themselves, one campaign at a time. Every "flat 50% off" brought in a burst of orders and a good week on the dashboard. Then customers learned the pattern, and started to wait.

This issue looks at what the research says about constant discounting, what Indian shoppers are telling surveys right now, and why limited, well-run drops can create demand without teaching customers that a brand's real price is half its listed one.

India's shoppers have learned to wait

Discounts drive Indian retail's biggest moments. In August 2025, Redseer projected that online festive sales would generate about ₹1.15 lakh crore in GMV, and it later expected the season to grow about 20–25%. In the first two days of the season, e-commerce GMV grew 23–25% year on year, helped by GST rate cuts on TVs, apparel and furniture.

Surveys from the same season show how deeply shoppers plan around offers:

A Paisabazaar survey of credit card users, reported in October 2025, found that 91% planned their festive purchases in advance around offers and discounts, and that fewer than 10% bought without waiting for special offers.
MiQ's Festive Shopper Insights 2025, based on more than 4,800 festive shoppers, found that 34% prioritised discounts and cashback, and about a quarter were influenced by flash deals, exclusives and influencer recommendations.
The same MiQ study found that 45% of festive shoppers were open to trying new brands, and that shoppers began researching nearly six weeks before Diwali.

Read together, those numbers describe a market that rewards whoever offers the best deal on the right day, and one where shoppers are very willing to switch. That's good news for a challenger brand running one festive sale. It's a problem for any brand that wants customers to come back the other eleven months of the year at a price that makes money.

Most promotions don't pay for themselves

The uncomfortable fact about discounts is that many of them lose money even before you count the long-term effects.

Nielsen's analysis of US consumer goods, published in 2014, covered more than 1 million products, 39 million promotional events and US$555 billion in retail sales across 150 retail banners. It found that almost three-quarters of promotions did not break even: the extra volume they generated didn't cover the cost of the discount and the trade spend behind it.

That study is more than a decade old and comes from US grocery, not Indian fashion or electronics. But the mechanics travel. A discount is paid on every unit sold during the promotion, including the units that would have sold at full price anyway. Unless the promotion brings in enough genuinely new buyers, or enough extra units, the brand ends up worse off.

The costs that don't show up on the campaign report include:

Pull-forward. Shoppers who would have bought next month buy now at a lower price. The spike is real; so is the dip that follows.
Subsidising loyal customers. Regulars who would have paid full price take the discount because it's there.
Leakage. As Issues 01 and 03 showed, shared codes travel far beyond their intended audience, so discounts reach people the brand never meant to target.
Channel conflict. Deep online discounts make the same product look overpriced at a partner store, which then stocks less of it.

The arithmetic of 50% off

A simple example shows why deep discounts are so hard to pay back. The numbers are illustrative, but the shape will be familiar to anyone who has run a sale.

Take a shirt with a list price of ₹2,000 that costs the brand ₹800 to make, ship and sell. At full price, each sale earns ₹1,200 towards the brand's other costs and profit.

At 20% off, the price is ₹1,600 and each sale earns ₹800. The brand needs to sell 1.5 times as many shirts to earn the same total.
At 40% off, the price is ₹1,200 and each sale earns ₹400. The brand needs three times the volume.
At 50% off, the price is ₹1,000 and each sale earns ₹200. The brand needs six times the volume just to stand still.

Few promotions multiply sales sixfold, and those that do usually borrow heavily from future weeks. Add platform commissions, payment fees and returns, which often don't shrink in step with the price, and a "flat 50% off" sale can lose money on every unit while looking like a record week on the revenue chart.

The deeper the cut, the faster the required volume climbs. That's why the same brand can run a profitable 15% offer and a ruinous 50% one.

Discounts move the price customers expect

The longer-term cost is subtler. Shoppers carry a mental benchmark for what a product should cost, which researchers call the internal reference price. Each price a shopper sees updates that benchmark.

A 2021 study by Daniel Sheinin and Albert Della Bitta in the Journal of Marketing Theory and Practice tested how promotions of different depth and frequency affect it over several purchase periods. Their findings:

Deep discounts lowered internal reference prices more than shallow ones.
Frequency moderated the effect: there were rough thresholds beyond which repeated promotions started to shift what shoppers saw as the normal price.
Premiums of the same value as a discount, such as a free extra product, preserved the reference price even when they were frequent and generous.

That last finding is the important one. It suggests the damage comes less from giving customers value than from cutting the price itself. A ₹2,000 shirt sold at ₹1,000 tells the shopper the shirt is worth ₹1,000. A ₹2,000 shirt sold with something extra, or offered only to a limited group, keeps the ₹2,000 in their head.

Once the reference price has dropped, full price feels like a rip-off. Shoppers wait for the next sale, the brand runs one because sales are slow, and the cycle repeats.

Scarcity works, but not the way most brands use it

If discounts train shoppers to wait, scarcity can give them a reason not to. Limited releases, often called drops, are built on that idea: a small quantity, a clear time window, and a real chance of missing out.

The research is supportive but specific. A meta-analysis by Belinda Barton, Natalina Zlatevska and Harmen Oppewal in the Journal of Retailing (2022) pooled 416 effect sizes from 131 studies on product scarcity and purchase intention. It found that the type of scarcity matters:

Demand-based scarcity ("selling fast because people want it") worked best for utilitarian products.
Supply-based scarcity ("only 500 made") worked best for experiences.
Time-based scarcity ("available until Sunday") worked best for high-involvement products that people think hard about buying.

In other words, a countdown timer on everything isn't a strategy. The scarcity has to fit the product, and it has to be true.

Scarcity has to be real, by law and by design

India's Central Consumer Protection Authority notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023 on 30 November 2023. They apply to platforms, advertisers and sellers offering goods or services in India, and they list 13 specified dark patterns. The first on the list is false urgency: creating a misleading sense of scarcity or urgency to push a purchase.

That rules out the tricks that give scarcity marketing a bad name: a "only 2 left" banner that never changes, a timer that resets when you reload, a "limited edition" that's restocked every week. Beyond the legal risk, shoppers notice, and fake scarcity teaches them to ignore real scarcity later.

Honest drops have a few things in common:

A real cap. The quantity is set before launch and enforced by the system, not by a banner.
A real window. Start and end times are published and kept.
Clear eligibility. Shoppers know who can claim, for example existing customers or followers of a particular store.
No surprise restock at a lower price. If the product comes back, it comes back at the same price, or the brand says upfront that it might.

Drops as an alternative to blanket discounts

A drop doesn't have to mean expensive sneakers and overnight queues. For most brands it's simply a way to give value to a defined group, for a defined time, in a defined quantity, rather than to everyone, always.

Some examples of how that can work:

A snacks brand releases 2,000 coupons for a new flavour, redeemable at partner stores in one city over one weekend, instead of cutting the price across every channel for a month.
An apparel label offers its festive collection to existing customers 48 hours before public launch, at full price, with a small premium such as free alteration. Scarcity comes from early access, not a markdown.
A neighbourhood bakery runs a weekly limited batch, claimable in advance, and sells out without ever discounting its bread.

Each of these gives customers a reason to act now, without moving the price they believe the product is worth. The value also goes to the customers the brand actually wants: existing fans, or new shoppers in a specific market, rather than whoever found a code online.

On Flicp, brands set up drops with a cap, eligibility rules, a time window and a redeem-by date, and shoppers buy them in rupees. Each claimed coupon belongs to one signed-in customer and is marked used at redemption, so a drop of 2,000 coupons means 2,000 redemptions, not 2,000 plus however many times the code was shared. Brands can also run auctions for exclusive lots, where customers bid with Sparks earned from coupon rewards. Sparks have no rupee value and can't be bought.

When discounts still make sense

None of this means brands should never discount. Discounts are useful when they're targeted and deliberate:

Clearing stock that is genuinely end-of-season or close to expiry.
Acquiring new customers who would not otherwise try the brand, if the offer can be limited to them.
Matching a competitive moment, such as festive season, where staying out would cost more than taking part.
Rewarding loyalty through personalised offers to known customers rather than public codes.

The difference is control. A targeted discount with a cap, an audience and an end date is a tool. A permanent sitewide discount is a new, lower price that the brand hasn't admitted to.

What brands can do this quarter

Count your discount days. Add up how many days last year the product was sold below list price. If it's more than half, the list price is fiction.
Measure break-even per promotion. Compare units sold during each offer with a normal baseline, after subtracting the discount given to buyers who would have bought anyway.
Swap some markdowns for premiums. Test a free add-on or early access against an equal-value price cut, and watch repeat purchases at full price afterwards.
Make scarcity real. Remove any countdowns or stock banners that aren't tied to actual caps and times.
Target the value. Give offers to defined groups, such as new customers in one city or existing customers on their birthday, instead of public codes.

What this means for store owners

Constant online discounting hurts physical stores first. When a brand's products are always cheaper online, shoppers use the store as a showroom and buy elsewhere, and the store owner stocks less of that brand.

Drops and limited offers redeemable in stores work the other way. They give shoppers a reason to walk in on a specific day, they come with a clear record of who claimed what, and they don't undercut the price on the shelf for everyone else. For a store, a brand that runs limited, store-redeemable drops is a brand worth stocking.

Five questions to ask about your discounts

On how many days last year did customers pay your full list price?
Which of your last five promotions actually broke even?
Do your repeat customers buy at full price, or only during sales?
Is every scarcity claim on your site backed by a real cap or deadline?
Could the value you give away in a sitewide sale be given to a specific group instead?

Coming in Issue 05: first-party data under India's Digital Personal Data Protection Act, and what the 2027 deadline means for how brands collect and use customer information.

Sources

The shirt margins and the snacks, apparel and bakery examples are illustrations, not reported cases. Survey figures describe the respondents of each survey and may not represent all Indian shoppers.

This newsletter is general information, not legal, financial or tax advice. Product details describe Flicp as it works today and may change.