Most retailers believe discounting drives sales.
Sometimes it does.

But behavioural economists have spent decades studying a more complicated reality. While discounts can increase short-term purchasing, they can also change how consumers think about value, timing, and future buying decisions. In some cases, repeated discounting can unintentionally train customers to delay purchases altogether.

This creates an important question for garden retailers:
When does a discount create demand, and when does it simply postpone it?

The answer lies in understanding how consumers form expectations.

Consumers Remember More Than Retailers Think

Most shoppers do not remember the exact price they paid for a product six months ago.
What they do remember is something behavioural economists call a reference price.

A reference price is the price consumers believe a product should cost based on previous experiences.

Every time a retailer discounts a product, that discounted price becomes part of the customer’s memory.
Over time, that memory begins to influence future behaviour.

A consumer who repeatedly sees roses marked down in late May may begin to associate roses with late-May pricing.
The next season, she may wait.
Not because she dislikes the product.
Because she has learned a pattern.

This behaviour has been observed across multiple retail sectors including fashion, consumer electronics, furniture, and grocery. Source: Kalyanaram & Winer, Empirical Generalizations from Reference Price Research

Retail Insight

Every discount sends two messages.

The first message is:
“Buy now and save.”

The second message is:
“Perhaps this product wasn’t worth full price.”

Retailers often focus on the first message.
Consumers frequently hear both.

Price Is Often Interpreted as Quality

One of the most fascinating findings in consumer behaviour research is that consumers often use price as a proxy for quality.
When expertise is limited, price becomes a shortcut.

A customer comparing two seemingly similar roses may not know:

• – The genetics
• – The production cost
• – The disease resistance
• – The maturity difference

What she does know is the price.

Research consistently shows that consumers frequently assume higher-priced products are superior products, particularly when they lack technical expertise.
Source: Monroe, Pricing: Making Profitable Decisions

This is especially relevant in garden retail.
Consumers are not only buying a plant.
They are buying confidence that the plant will survive and perform.

When a healthy-looking plant suddenly carries a steep discount, some customers interpret that discount as value.
Others interpret it as a warning.

The Fashion Industry Learned This Lesson Years Ago

Few industries have studied discounting more extensively than fashion.
For years, many apparel retailers relied heavily on promotions to drive traffic.

The result was predictable.
Consumers stopped buying at regular price.
Instead, they learned to wait.

Research from Harvard Business School has shown that repeated promotional activity can alter consumer purchasing patterns and reduce willingness to pay full price.

Source:
Harvard Business Review, The High Cost of Discount Culture

The same principle can apply in garden retail.
If customers consistently expect markdowns near the end of the season, some will simply delay their purchases.

The irony is that the retailer may not be creating additional demand.
They may simply be shifting demand to a later date at a lower margin.

Gardening Is Different Than Most Retail Categories

There is an important distinction, however.
Not all discounts are harmful.

Plants are living products.
Unlike televisions or furniture, they have a finite selling window.
A declining seasonal opportunity sometimes requires pricing adjustments.
Consumers generally understand this.
What matters is how those discounts are positioned.

A clearance rack full of stressed, declining product sends one message.
A healthy collection of premium plants suddenly reduced by 40 percent sends another.
The first feels logical.
The second can create questions.

Consumers naturally wonder:

• – Why is this discounted?
• – Was it overpriced before?
• – Should I wait next year?
• – Is there something wrong with it?

These questions influence future buying behaviour.

Smart Retailers Discount Strategically

The most effective retailers understand that discounting is a tool, not a strategy.

Instead of relying on blanket markdowns, they focus on:

• – Seasonal timing
• – Inventory management
• – Product freshness
• – Value-added offers
• – Strategic promotions

Most importantly, they protect the perceived value of their core products.
Because once value perception erodes, rebuilding it can be difficult.

Retail Insight

Consumers are surprisingly willing to pay full price when they believe:

• – The product is worth it
• – The outcome is desirable
• – The opportunity feels timely
• – The product may not be available later

Urgency often creates stronger purchasing behaviour than discounting.

What Garden Retailers Should Focus On Instead

Rather than asking:
“How much should we discount?”
A more productive question may be:
“How can we increase perceived value?”

This can be accomplished through:

• – Better merchandising
• – Clearer signage
• – Improved collections
• – Stronger storytelling
• – Better plant quality
• – Increased confidence

The goal is not to convince consumers to spend more.
The goal is to help consumers understand why the product is worth the price.
When value is clear, discounting becomes less important.

Final Thought

Discounting can move inventory.
But it can also move expectations.
Every markdown teaches consumers something about value, timing, and future behaviour.

The most successful retailers understand that price is not simply a number.
It is a signal.
And consumers are constantly listening.

In the end, customers are not looking for the cheapest plant.
They are looking for the plant that gives them the greatest confidence that their investment will be rewarded.