Luxury Fashion Deep Discounting

by Allison Mann

Luxury and designer retailers are labeled as such due to their historically elite status, hefty price tag, and elevated customer shopping experience. For as long as we’ve known and loved them, Gucci, Louis Vuitton, Yves Saint Laurent, and Chanel have been synonymous with status, aristocracy, opulence, and, for lack of a better word, boujee. Many dream of owning that signature classic diamond quilted Chanel bag but don’t exactly have three grand to drop on an accessory. Is now - a time where luxury retail stores are suffering due to the lack of splurging on non-essential items - a perfect time to target that bag you’ve dreamt about? Will luxury retailers begin to discount their items in an attempt to raise their quantity of sales? How will luxury designers combat the drastic decrease in sales that they have been experiencing due to global pandemic? Chanel wouldn’t dare post a ~sale price~... Or would they? According to Forbes, “…with falling demand fueled by Coronavirus and 58% of consumers we surveyed recently cutting spending, luxury retailers are looking at a glut of inventory 32% higher than that of a year ago, according to a Vogue piece quoting EDITED retail analyst Krista Corrigan”. This is something that we have never before witnessed, and I’m sure everyone fashion-obsessed is on the edge of their seats waiting to find out what is to come. Is it possible that we will finally be able to cop the style of our favorite designers without burning a hole in our wallets?


Designers and retailers everywhere are experiencing a surplus of products due to the closing of brick-and-mortar shops around the world. Sales for this year’s spring 2020 season are down a whopping 70% from this time last year. Think about all of that extra loot! As difficult as it is to speak on, in the past, the excess product from a luxury designer would be completely pitched or burned without a second thought. Thanks to the increasing need for sustainability and less waste, this idea is obsolete. So, burning excess product is not an option… retailers need to make room in their inventory for their autumn and winter 2020 lines… is it possible that brands will sacrifice brand equity in exchange for sales? Or will designers have to find another way to reach their clientele on a level so deep they will continue to remain loyal through practices such as e-commerce experience, exceptional customer service, and environmental consciousness?


Designers may be better off devising plans for the latter of the previously stated options, given that discounting and major risks for luxury companies are kind of a package deal - a prominent reason as to why brands are historically averse to doing so.


Resources:

https://www.forbes.com/sites/gregpetro/2020/05/21/will-the-coronavirus-finally-force-luxury-brands-to-discount/#2e17c57f148d

https://www.mckinsey.com/industries/retail/our-insights/a-perspective-for-the-luxury-goods-industry-during-and-after-coronavirus#

https://www.voguebusiness.com/companies/luxury-brands-gear-inventory-louis-vuitton-prada

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