Information Technology Reference
In-Depth Information
Tips for online price-discounting
In an ideal world luxury brands shouldn't reduce product prices, particularly
online. But because we don't live in a perfect world, the following tips could
be useful in dealing with the issue of price discounting:
1. If price discounting is not in your brand's policy, do not be forced to reduce
prices due to pressure from the economy. Luxury clients are still spend-
ing on luxury goods, albeit in a different way, while demanding all-round
value from the product and the brand. If your brand concentrates on pro-
viding this value, you may not need to reduce your prices.
2. Approach price discounting online the way you do offline. That is, if your
discounted products are discreetly displayed in a corner of your physical
store, do so online by creating a corner for the items with reduced prices
(not on the home page please).
3. Anticipate how the online public may react to your brand's price reduc-
tion. Every product or service type has its specificities and peculiarities
and the way clients may react to the price cut of a fragrance is not the
same way they may react to the price cut of jewelry.
4. Apply a coherent pricing strategy in both your direct e-retail and that of
independent e-retailers who sell your products. There is no point having a
“no discount” policy if your products may be found at reduced prices all
over the Internet.
5. Don't believe the people who tell you that you cannot avoid price dis-
counting unless you're Louis Vuitton. If you have the right systems and
policies in place and have invested in your brand, you could be able to
avoid discounting online. In this case, please do so by all means.
The sample sale syndrome
In 2001, when Jacques-Antoine Granjon had the vision of launching
VentePrivée.com, the first private sample sale website, he had no idea that he
was on the verge of introducing a new chapter in the second wave of Internet
revolution, not to speak of opening a can of worms in the process. Introducing
a new way of e-retail characterized by a restricted environment both in access
and sale period, price discounts of up to 70 percent, limited access to members
only as well as an invitation-only format for membership, VentePrivée rede-
fined online shopping, particularly for sensory products of brands with a high
brand equity. Although VentePrivée is not dedicated exclusively to luxury prod-
ucts, it has created a special space for the sale of luxury products on its website
called VP lounge where brands like Dunhill, Sergio Rossi, Bottega Veneta and
Christophle have made appearances. In the process, VentePrivée has built a ded-
icated community of online shoppers who snap up products within minutes of
their going live, including thousands within the high-income bracket.
