Perception

Free shipping sends one message. You're willing to stand behind your prices, but you are willing to absorb losses from an operational standpoint.

25% off sends a different message. You suggest to the customer that the reason the customer isn't buying isn't your merchandise, but instead that your prices are simply too high.

Everyday low prices teach the customer that you can be trusted.

There isn't a right/wrong way to do any of this. JCP and Macy's have been discounting forever, it's part of their game and the customer still shopping there understand the game. But understand ... you are who you say you are. 

And what you prioritize via email & home/landing pages & print determines who you are. You can trim the number of low-cost items you sell and still feature low-cost items. There are many ways to make customers happy while optimizing profitability.