When discretionary demand weakens or becomes uneven, retailers often reach for the most visible growth lever: a stronger value message. Kohl’s renewed emphasis on back-to-school deals illustrates how promotions can be used to win seasonal traffic, while Lowe’s lowered outlook amid pressured DIY spending shows the limits of relying on broad consumer demand. At the same time, Lowe’s reported growth in Pro, home services and online sales, indicating that customer and channel mix can create opportunities even when a major spending segment is under pressure.
These businesses do not face identical demand conditions. Kohl’s sells apparel and other discretionary merchandise into a seasonal shopping occasion; Lowe’s serves project-based home improvement demand across DIY and professional customers. The useful connection is therefore not a direct performance comparison. It is a planning question: when value becomes essential to winning demand, how can operators decide what to discount while protecting the economics of the overall basket?
Separate the traffic offer from the profit plan
A promotion should have a defined job. It may acquire customers, reactivate lapsed shoppers, clear seasonal stock, defend share in a highly visible category or encourage a larger basket. Trouble begins when “drive sales” is the only objective and the discount spreads across products that customers would have bought at full price.
Kohl’s back-to-school push is best read as an example of occasion-led value: families enter the market within a relatively clear shopping window, and compelling deals can help a retailer enter their consideration set. Operators using this approach should identify a narrow group of traffic-driving items whose prices customers are likely to compare. Those offers become the front door, not the entire store.
Before approving a campaign, assign each promoted item one of three roles:
- Traffic driver: a visible, price-sensitive item intended to generate visits or clicks.
- Basket builder: a product discounted only when it increases quantity, category penetration or complementary purchases.
- Inventory action: a targeted markdown designed to reduce exposure to seasonal, aged or overstocked units.
Products with stable demand, limited comparability, strong differentiation or constrained supply should usually sit outside the promotional pool. Preserving their price helps finance the offers customers notice most.
Make category elasticity—not urgency—the discounting rule
Retailers under sales pressure can mistake a broad demand problem for a universal price problem. Lowe’s pressured DIY outlook is a reminder that spending can be affected by project timing, customer confidence and category conditions, not only shelf price. A discount cannot reliably create a project that a household has decided to postpone.
Category teams should estimate promotional sensitivity using the retailer’s own history. Useful questions include: Did prior discounts create incremental units or merely shift purchases forward? Did customers trade down from full-price alternatives? How quickly did volume return to baseline? Was the offer redeemed mainly by shoppers who already buy frequently?
Where evidence is incomplete, test rather than generalize. Compare selected stores, customer groups or digital audiences with a holdout group. Run different offer depths on comparable products and evaluate contribution margin, not revenue alone. A shallow discount that generates similar demand to a deep one is an immediate margin opportunity.
Inventory position must also shape the decision. A planned quantity of promotional merchandise, bought at economics designed for the event, is safer than discounting the standard assortment after demand disappoints. Set unit limits and exit rules before launch so a traffic offer does not become an open-ended price commitment.
Protect the basket through attachment and segmentation
The margin test for a discounted item is not its unit margin in isolation. It is the incremental profit produced by the customer visit. A low-margin back-to-school staple may be productive if it generates full-price purchases in adjacent categories. The same offer is destructive if shoppers buy only the deal or substitute it for a higher-margin product.
Merchandising teams should map likely attachments before campaigns begin. Place complementary items in the same landing pages, search results, displays and fulfillment communications. Bundles can reward a complete purchase rather than discount every component. Threshold offers can also protect economics when they are calibrated to lift basket value beyond what the customer would normally spend.
Segmentation further reduces unnecessary subsidy. New or lapsed customers may justify an acquisition offer; loyal, high-frequency shoppers may respond better to early access, convenience or rewards than to a storewide price cut. Customers showing strong intent for a specific item may need no incentive, while price-sensitive shoppers can receive a targeted offer on a known traffic product.
Operators should monitor whether promotions change customer composition. If an event attracts mostly deal-only buyers with weak repeat behavior, headline traffic may overstate its value. Measure subsequent full-price purchases and repeat visits where the available attribution window allows it.
Build growth paths that do not depend on lower product prices
Lowe’s reported growth in Pro, home services and online sales provides three distinct planning signals. First, customer segments can move differently: professional demand may not mirror DIY demand. Second, services can capture spending around a project even when product demand is uneven. Third, online execution can improve access and conversion without requiring a universal discount.
Retailers should translate those signals according to their own model rather than copying a home-improvement strategy. Segment-specific propositions might include trade-oriented availability and account support, curated seasonal solutions, loyalty benefits or faster replenishment. Service revenue might come from installation, alterations, assembly, delivery, subscriptions or product protection, depending on the category. The key is that the customer receives additional utility rather than simply a lower ticket price.
Online growth also requires more than publishing promotional banners. Operators should inspect search exits, product-page conversion, stock visibility, delivery promises and checkout abandonment. If customers cannot find the right size, understand compatibility or trust the fulfillment date, another discount may reduce margin without fixing the conversion barrier.
Digital channels are especially useful for controlled experimentation. Retailers can vary merchandising, bundles and targeted incentives while protecting storewide price integrity. They can also suppress offers for customers who have already demonstrated high purchase intent.
Close every campaign with a margin bridge
Post-campaign analysis should reconcile the apparent sales gain with its full economic cost. Begin with incremental revenue versus a credible baseline, then account for merchandise margin, vendor funding, fulfillment expense, marketing cost, returns, loyalty liabilities and markdowns avoided or created. Include cannibalization from comparable full-price products and any evidence that customers bought earlier than they otherwise would have.
A practical review should answer five questions: Which offers generated genuinely incremental traffic? Which categories showed enough elasticity to justify the discount? What attached to promoted products? Which customer segments and channels delivered the strongest contribution? What happened after the offer ended?
The next promotion should inherit those findings. Expand offers that create profitable baskets, narrow those that mostly subsidize existing demand and stop campaigns that produce revenue without acceptable contribution. Meanwhile, invest in segment propositions, services and digital conversion improvements that can grow demand without resetting customers’ reference prices.
Value can remain a powerful retail message, particularly around a defined occasion such as back-to-school. Margin protection depends on treating value as a selective customer proposition—not as permission to discount the whole assortment.
