Around 5–7 years ago, many luxury brands stopped offering markdowns. Among them are Saint Laurent, Bottega Veneta, Prada, Miu Miu, Fendi. If you know where to look, you can still find some in multibrand stores with seasonal discounts, but the general strategy is a no-discount policy, explained as a necessity to protect the brand and its value.
A few practices I’ve noticed currently being used in eCommerce (and I assume the same applies offline, though there might still be sale days or corners like Hermès or CHANEL have):
• No discounts at all
Example: Saint Laurent, Fendi (used to have 40–50% end-of-season discounts)
• Private sales by link only
Example: CELINE. To see the discounted items, you had to log in using a link from a newsletter. The marked-down items were also available offline in boutiques — I happened to pass by and double-checked
• Market-specific sales
Example: Loewe, GIVENCHY sales are available particularly in the USA but not in Europe. This is an interesting approach — you might know that marketing and selling strategies in the USA are more straightforward and overwhelming
• Public long-term sales, sometimes with increasing markdowns over time
Example: KHAITE, The Row, Balmain, Versace, Jimmy Choo
My thoughts on why refusing end-of-season markdowns is a wrong move, especially during the luxury slowdown (but not only because of that), I shared in one of the editions of 2Jour Gazette here.
If I were to design a markdown approach for a luxury brand, here’s what I would suggest:
• Sales are strictly time-limited
This shouldn’t be a long event — 2-3 weeks is enough. I wouldn’t go beyond two. A limited timeframe creates a sense of urgency.
• Discounts should be fixed, without further increases
Often, customers wait for deeper discounts, which can impact how the brand and its value are perceived. So plan the maximum discount you can offer right from the start. The standard practice is: 50% off RTW, 30–40% off shoes, accessories and bags.
Also, don’t skimp on 20–30% discounts — leftover seasonal collections will eventually have to be written off or destroyed, which will require additional resources. Stinginess will backfire (as it always does). Balance the attractive side which is not harmful to the brand’s image.
• Add an element of play and engagement
CELINE is a great example, although I only learned about their sale because I had an account. Ideally, there should be preliminary work before the sale — invite people to subscribe to a newsletter to get access to discounts. The collected data can later be used for brand communication.
• An advanced level — working with loyal customers
This is where you can offer exceptional discounts or early access to the sale. Loyal customers are those who have spent a certain amount and/or are valuable in terms of return/brand aims.
2Jour Gazette is back next week. Stay tuned x