Metaphore MagazineLuxury Unfiltered: The True Cost of Lowering Luxury Prices – Pricing plays a pivotal role in the luxury sector, impacting both revenue and brand perception. Whether launching new products, adjusting current strategies, or seeking to boost profitability, pricing decisions in luxury are never trivial. They are a reflection of the value a brand provides, deeply rooted in the psychology of desirability.
At Équité, the response to our pricing expertise has been global, with top publications highlighting how many brands overlook the importance of pricing, often falling into the “easy growth trap” of discounts. Promotions might increase short-term sales, but they erode long-term brand value, disrupting exclusivity and trust.
Many luxury brands mistakenly focus on product features when they seek to premiumize, neglecting the crucial role of storytelling and client experience. Brands like Burberry and Gucci have faced challenges by sidelining their narratives, which led to significant declines in sales. Without a compelling brand story, pricing loses its power to convey value.
Discounting luxury products sends a dangerous message—that the original price was inflated or unjustified. This not only devalues the specific item but damages the entire brand portfolio. The psychological impact on loyal customers, who bought into the brand’s promise, is profound and often irreversible.
Successful brands like Louis Vuitton and Hermès understand that luxury is about scarcity and the belief that their products are worth every penny. They never discount, opting instead to build brand equity through superior experiences and regular price increases. This approach reinforces the emotional connection between the brand and its consumers, ensuring long-term success.
In today’s competitive market, luxury brands must resist the temptation to discount, even when faced with market pressures. Pricing is not just about keeping pace with trends—it’s about defining them. When luxury brands lower their prices, they risk losing the aspirational quality that drives their allure, often taking years to recover.
The true cost of discounting is far greater than any short-term revenue gain. It costs brands their equity, consumer trust, and ultimately, their future.
About Daniel Langer
Daniel Langer is the CEO of Équité, a global leader in luxury strategy and brand activation. Recognized as a top-five global luxury expert, Langer teaches luxury strategy and pricing at Pepperdine University and NYU, and is a renowned author and keynote speaker.
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