Information Technology Reference
In-Depth Information
as long as the stock lasted), in which anyone with some cash in their pocket
was invited. There were no formal and private invitations and there was no
discreet store corner display. All the merchandise were displayed in the same
open space and given the same level of high visibility. The difference, how-
ever, is that the products were not in the Dior store. The brand had hired a
section of a renowned Parisian museum and converted it into a temporary
store for the end of season sale. The opening hours were the same as the
store's and the attention and service were no different. The location, how-
ever, remained discreet and there were no window or public displays that
indicated that there was a sale going on with price cuts at up to 50 percent
off the original prices. Despite the fact that this was a discreet pop-up sale
store it was widely discussed in the Parisian fashion circles and within days
the entire collection was sold out. The effect that this strategic approach to
price discounting had on the client was that of special privilege irrespective
of the fact that it was open access, and that of confidentiality despite this
store being common knowledge. In addition, the coherence with the Dior
shopping experience as well as the location choice added a touch of original-
ity and appeal to the sale event. Consequently, even the wealthiest of clients
weren't ashamed to be seen rummaging through the collections and the
brand suffered little damage to its image and positioning. You may be won-
dering if Christian Dior reproduced the same feat online and the answer is
no. Why? Simply because the online channel is an open platform where the
whole world has access to both information on price slashes and the oppor-
tunity to purchase.
The issue of price discounting has been a recurring debate in the luxury
sector for a long time. Apart from brands like Louis Vuitton and Annick
Goutal that have a clear and strict “no discount” policy, several brands
like Gucci, Hermès, Chanel, Armani, Dior, Fendi as well as jewelers like
Cartier, Boucheron and Bvlagri have all been seeking ways to overcome
the discount dilemma. Most have adopted in-store discount of selected
products displayed in a discreet format while others have an “open” dis-
count policy which is offered to clients on a one-to-one basis. Although
price-cutting doesn't necessarily enhance a luxury brand's image or add to
its equity, this is not a practice that brands involve themselves in out of
choice; they do so due to necessity. Let's face it, the inventory has to be
cleared at some point and old unsold stock has to give way to new col-
lections because not every brand has the clout of Louis Vuitton which has
practically zero unsold seasonal stock. The brands that have approached
price-discounting with an intelligent strategy have been able to pull
off price discounting unscathed but the Internet has made tackling this
dilemma more challenging.
The accessibility and availability of the Internet is both a blessing and
a curse for luxury brands. It provides the advantage of being a propeller of
brand awareness, communications and positioning but at the same time is
