Sales Are Growing, but Margins Are Shrinking. When Do Promotions Become a Problem?

Three signals worth checking

1. 01

   Revenue spikes during promotions but drops when discounts stop.

2. 02

   Marketplace fees, ads, delivery subsidies and returns are not captured in unit economics.

3. 03

   Teams are rewarded for GMV or revenue without assessing profitability or customer quality.

What should leadership do next?

1. 01

   Calculate per-order contribution before and after the promotion, net of variable costs.

2. 02

   Estimate incrementality: which orders would not have happened without the promotion?

3. 03

   Strengthen reasons to choose beyond price, reducing dependence on incentives.

What does the evidence say?

Kantar connects profitable growth with meaningful difference and commercial levers including presence, pricing and promotions. The example above is ALIGN’s explanatory arithmetic, not a Kantar research finding.

Sources & context

• Kantar — Blueprint for Brand Growth ↗