Global luxury brands opt for ‘sale’ route to woo customers

After the rush to declare early discount sale by most global and domestic apparel brands and retailers, to clear inventories and make way for the fresh stocks, global luxury giants like Chanel, Christian Dior and others too have joined the fray.

Most have opted for sale or low price-tags on select items to attract first time customers. But is attracting first time buyers the sole purpose behind offering discounts? Or are these brands finding it difficult to woo customers amidst the hype over India’s love for luxury brands?

Indeed, domestic retailers were worried whether customers would throng the shopping malls amid on-going economic conditions. After lukewarm sales in May, many brands including Arrow, French Connection and Puma advanced the start of their end-of-season sales to the last week of June instead of the traditional July. And now international luxury brands such as Chanel, Christian Dior and Burberry have started discount sales at their outlets in Delhi, Mumbai and other cities supposedly to increase footfall and clear inventory. Chanel offers 30 per cent sale on its ready-to-wear section twice a year while Dior offers discounts on items such as clutches and shoes.

According to the CII-AT Kearney study, “End of season sales has played a good role in getting more Indians to get their first experience of luxury.” And brands such as Giorgio Armani, Paul Smith, Bottega Veneta, Canali, Burberry and Jimmy Choo present in India believe that lowering the product prices not only introduces consumers to taste the luxury but also makes them regulars at these showrooms.

While the motto behind offering discount and sales is to clear old stocks, high-end luxury labels don’t create a hype around it and most like Chanel only inform loyal customers about the offers. Whatever may be the strategy the fact remains that the slow economy and low consumer buying sentiment has not only affected the domestic retailers and brands but also forcing these luxury brands to put the big labels on sale.

Moreover, most international luxury brands do not operate more than five stores in India, so getting rid of the old inventories to make way for new stocks becomes absolutely mandatory. Of course, there are labels like Hermes, Louis Vuitton, Cartier and Tom Ford that follow the global strategy of not offering discounts and making it clear that these labels are worth the price-tag they carry. But they are losing out on customers, who are easily getting the products of these labels at lower prices on e-shopping platforms.