The Perils of Discounting: James Hurman’s Data-Backed Caution for Retail Brands

In a recent LinkedIn post, James Hurman discusses the detrimental effects of frequent discounting on retail brand growth, even amidst economic challenges and consumer habits geared towards sales. Hurman, who recently presented findings from a study titled ‘Sugar High! The sour truth about the real cost of discounting,’ argues that while discounting might seem like a quick fix, it ultimately hinders long-term brand health.

The study, which utilized data from Klaviyo and ProfitPeak, analyzed over 7,500 e-commerce brands between 2025 and 2026. The findings present a stark warning about the consequences of excessive promotional activity.

“Excessive use of discounts has been shown to reduce brand growth, erode margins and create a dependency that’s difficult to break.”

This core message underscores the central thesis of Hurman’s analysis. He elaborates on the negative impacts observed in the data.

Discounting’s Double-Edged Sword

Hurman highlights several key negative outcomes associated with heavy discounting. According to the research, brands that engaged in the most frequent discounting experienced the lowest growth in both topline revenue and gross merchandise volume (GMV). Furthermore, their profit margins were not only weaker but also in decline.

Impact on Customer Acquisition

A significant finding, as noted by Hurman, is that the majority of purchases made during discount periods came from existing customers. This suggests that discounting is largely ineffective at attracting new clientele, a crucial element for sustainable business growth. The study indicates that sales events primarily moved existing inventory rather than acquiring new customers or clearing out slow-moving stock.

Hurman points out the inefficiency:

“Most discounted purchases went to existing customers – they brought few new customers to the brand”

and

“Big sale events mostly sold the best stock that didn’t need to be discounted – and cleared very little slow-moving stock”

.

Breaking the Discounting Cycle

The post also touches upon the difficulty of reversing a discount-dependent strategy. Hurman implies that brands can become trapped in a cycle where consumers only purchase during sales, making it challenging to regain full pricing power and improve profitability. He references the successful turnaround of a heavily discounting brand, sharing insights from Justin Hillberg of Culture Kings, who provided a playbook for reclaiming margin and business health.

In his analysis, James Hurman argues that a strategic shift away from constant discounting is essential for brands aiming for robust and healthy growth. The data presented in the ‘Sugar High!’ study serves as a cautionary tale, urging businesses to reconsider their promotional strategies and focus on building brand value rather than relying on price reductions.