Black Friday Without the Bleed: The Deep Discount Dilemma

Every November, the digital marketplace feels like a battlefield. Retailers drop prices by 40, 50, sometimes even 70 percent, hoping to drown out competitors and capture fleeting customer attention. But behind the curtain, a different story plays out: profits shrink, returns surge, and customer loyalty erodes.

One founder described it bluntly after last year’s Black Friday Cyber Monday (BFCM): “I went big with discounts, drove a ton of sales, and still barely broke even. After returns and ad costs, I might have actually lost money.”

It is a common story. On Black Friday 2023, U.S. online sales reached $9.8 billion, a 7.5% increase over 2022, according to Adobe Analytics (ecommercebytes.com). In 2024, the number climbed to $10.8 billion, up another 10.2% year-over-year (statistics.blackfriday). Holiday spending overall reached $241.4 billion online between Nov. 1 and Dec. 31, 2024, an 8.7% YoY increase (news.adobe.com).

The demand is clearly there, but too often, brands are chasing revenue at the expense of profitability. When everyone races to the bottom, the “winner” is not the one with the deepest discount. It is the one who delivers value without gutting margin.

The Psychology of BFCM: More Than Math

Consumers do not just buy because of discounts. They buy because of timing, social proof, and the cultural gravity of the event. As one retailer in a community thread put it, “Sometimes just yelling ‘Black Friday’ drove more sales than the size of the discount.”

Black Friday itself is the signal. Customers expect participation, but not every brand needs to offer 50% off to be relevant. What shoppers really want is urgency, exclusivity, and the feeling of getting more than they normally would.

If you understand that psychology, you can engineer value that feels compelling without handing away half your margin.

Tactic 1: Bundle With Purpose

Bundles let you increase average order value (AOV), move slower inventory, and tell a stronger brand story.

A Hawke Media client in the skincare category avoided sitewide discounts and instead created a holiday bundle: cleanser, moisturizer, and a travel-sized serum. The discount was modest, about 15%, but the perceived value was much higher. Customers loved the “complete set” angle, and AOV increased by 32% compared to their previous BFCM.

The lesson: bundles are not just about clearing stock. They are about packaging a solution. Create bundles that solve a problem, complete a ritual, or add convenience. Market them as limited holiday exclusives so they feel special rather than like clearance tactics.

Tactic 2: Exclusivity Over Volume

Black Friday is one of the few times of year when shoppers actively want to feel like insiders. “VIP early access” emails, text-only flash drops, and private collections can outperform blanket discounts.

A luxury outdoor gear brand ran a campaign offering loyalty members 48-hour early access to their BFCM offers. Inventory was limited, and discounts were modest at 20%. Still, products sold out in under two days. The exclusivity, not the depth of the discount, was the real driver.

Scarcity works. Early access, gated sales, or even password-protected storefronts make people feel they are getting something others cannot. That urgency can replace the pressure to discount deeper.

Tactic 3: Gifts Over Discounts

Free gifts with purchase flip the script. Instead of subtracting value from your products, you add to them.

One jewelry client we supported swapped out 50% discounts in favor of a free polishing cloth and velvet pouch with purchases over $100. The items cost less than $3 per order, but the perceived value was far higher. Conversion rates jumped, and their net profit margin during BFCM exceeded their average month.

The key is alignment: gifts should enhance the core product experience. For beauty, that might mean travel sizes. For apparel, accessories. For tech, cleaning kits or protective cases. It feels generous, but costs a fraction of a deep discount.

Tactic 4: Lean Into the Event, Not the Percentage

Consumers are primed to shop on BFCM whether your discount is 15% or 50%. As one merchant noted, “Send an email titled Black Friday in August, I guarantee you will get engagement.”

It is not the math, it is the moment. Framing your campaign around Black Friday hype, early previews, countdown clocks, or mystery drops can drive performance even with modest offers.

Small perks can carry weight: free shipping sitewide, “biggest sale of the year” messaging, or spend-based thresholds such as “Spend $150, get $25 off.” These tactics leverage event psychology while keeping margins intact.

Tactic 5: Real-Time Profit Tracking

Perhaps the most sobering lesson from last year is thinking you have “won” BFCM only to realize in January that you lost money.

One retailer shared that after discounts stacked and ad costs ballooned, they were down over $15,000 in profit. Their solution this year was using tools like TrueProfit to monitor margins in real time.

At Hawke Media, we recommend going into BFCM with profit guardrails. Track AOV, CAC, and return rates daily. When monitored closely, brands can pivot mid-sale instead of diagnosing losses after the fact. Without visibility, discounts and ad spend can snowball into disaster.

The Case for Strategic Discounting

To be fair, not all discounting is reckless. For brands with a strong understanding of customer lifetime value (LTV), offering steep Black Friday deals can be a strategic move.

If you know, for example, that your average first-time customer goes on to spend $500 over the next 18 months, taking a $20 to $30 margin hit to acquire them at BFCM may be entirely rational. In this scenario, the discount functions as a customer acquisition cost (CAC), and one that can be justified if your retention strategy is strong.

The catch is that this only works if you are basing your calculations on verified data, not assumptions. Too often, brands assume customers will stick around when in reality churn rates post-holiday are high. Without reliable LTV modeling, a “strategic” discount quickly becomes a profit sinkhole.

At Hawke, we advise clients to validate LTV using historical retention data, cohort analysis, and tools that track post-purchase behavior. Only then should you decide whether a 40% BFCM discount is a growth lever or a gamble.

Case in Point: Smarter Plays Win Long-Term

We have seen this firsthand. With Kettl Tea, rather than leaning on heavy discounts, campaigns emphasized brand storytelling and targeted promotions. The result was sustainable year-over-year growth while maintaining a premium positioning.

Similarly, TileMart focused on smarter campaign structuring, including bundling, upsells, and segmented offers. Their year-over-year growth outpaced previous holiday seasons without relying on steep markdowns.

The pattern is clear: whether through smarter promotions or selective discounting tied to verified LTV, brands that engineer value creatively grow sustainably.

The Bigger Shift: Competing on Brand, Not Price

The arms race of discounts is unsustainable. Every brand can slash 50%. Not every brand can craft a campaign that deepens loyalty, raises AOV, and protects margins.

As one founder put it after rethinking their strategy: “Last year, I competed on price. This year, I am competing on brand.”

That is the shift worth making. BFCM does not need to be the weekend where you bleed margin for the sake of revenue headlines. It can be the moment where you showcase your brand at its most creative and walk away stronger.