'We've decided to stop seasonal discount campaigns at Hem. Not because it looks better in a press release, but because it breaks how our customers actually work. Architects specify at one price, clients see another a few weeks late. That gap makes business difficult for all stakeholders,' Founder & CEO Petrus Palmér of Hem says in a statement on LinkedIn.
© HEM
Like most addictions, it started innocently. During the pandemic, Swedish furniture brand Hem began offering small sales to move inventory, starting with occasional 10% discounts. The strategy worked almost magically, so the company increased the discounts to 15%, then 20%. "Once you've tasted that, wow, it was something special," says Hem founder and CEO Petrus Palmér to Business of Home.
Things eventually spiraled out of control. Discounts at Hem increased to 30% and even 40%, sometimes creating confusion about the actual prices. The company ultimately decided to end the practice of regular discounting.
The decision is also practical. Hem now depends heavily on wholesale clients, including architects and designers, for whom aggressive discounting can cause complications. Additionally, constant price cuts in an international online market can create a "race to the bottom," increasing competitive pressure.
Although eliminating discounts may impact direct-to-consumer sales, it allows the brand to concentrate on its core value: creating better products, developing stronger storytelling, and engaging customers more effectively, rather than relying on frequent promotions.
Petrus Palmér concludes his LinkedIn post with:
"I believe real change is simpler: you either build short-term demand through campaigns, or long-term demand through specifications. Doing both is contradictory and diminishes brand value. I'm curious to hear what others think about this.
Can seasonal discounts and long-term specifications truly coexist?"
