The Luxury Brand Is Caught In An Endless Discount.

Light luxury brands discount and reduce prices so as to expand market share and increase revenue and profits. This makes it easy for them to deviate from the image of high-end and modern luxury brands originally hoped for, and the result is that the brand value is diluted.

For light luxury brands, price cuts may usher in short-term performance improvement, but this does not seem to be a long-term development consideration.

The luxury brand seems to be on sale all the time, but in the near future

It has caused the concern and worry of Credit Suisse analysts.

Take Michael Kors as an example.

From October to December last year, 18% of Michael Kors's handbags were on sale, which was higher than the average of other similar brands in the same period (16%).

During the holiday of December, 65% of the handbags sold on Michael Kors's website were on sale.

Originally, Michael Kors is not the most popular discount brand in light luxury brands. From the fourth quarter of last year to the first quarter of this year, they will also reduce the number of handbags from 27% to 23%, but even so, the overall sharp reduction in the past few months has made MK no longer the smallest luxury brand with the lowest discount.

In February of this year, when other brands were reducing sales promotions, 37% of Macy 's Michael Kors counters were on sale, far higher than the average 28%.

The promotion did not boost the performance of Michael Kors in the stock market, and MK, which is still at a low level (62.31), is still not able to satisfy investors.

The situation of Coach is also very similar. Their discount rate is also higher than the average level, and the trend of this price reduction is still rising sharply.

At present, Coach is the more than 2 largest discount brand in light luxury brands after MK.

26% of the Coach product price tag is marked with a "reduction".

Analyst Christian Buss also noted that Michael Kors and Kate Spade had the highest online promotion efforts. 45% of the two handbags sold on the official website of the brand were on sale, far higher than the average of other brands 29%.

This seems to be exactly what MK wants to achieve. They believe that the new official website has greatly boosted online sales.

Why is the price of light luxury brand so fierce? Why? On this issue, interviewed the Fashion Critic Lin Jian and Roland Begg consulting company senior partner and vice president of Greater China Ren Guoqiang.

Lin Jian is linked to some recent developments.

Price adjustment has been carried out.

He pointed out that luxury brands like Chanel make a price adjustment to flatten the price gap between domestic and foreign commodities, which is bound to hurt sales of light luxury brands. Michael Kors and other brands need to respond to this, and price reduction is one of their responses.

Speaking of the impact of the price reduction of light luxury brands, Lin said that this may have a greater impact on some domestic fashion brands.

Originally, the price gap between Michael Kors and domestic brands is not too big. Customers purchase their products in pursuit of fashion and popularity.

When MK prices go down sharply, local fashion brands will lose their price advantage even after catching up with consumers.

But for the overseas luxury brands themselves, they may also encounter difficulties in selling some of the goods in the shop.

In the long run, Christian Buss, an analyst, cautioned that the high price cut of light luxury brands will only bring more drawbacks.

Not long ago, Chanel also announced global price adjustment, including lowering the price of the Chinese market.

But this price adjustment strategy is different from the long term, large-scale, seasonal discounts and the Outlets mode of light luxury brands. Chanel aims to pull the global price instead of reducing the price.