Luxury Really Isn’t for EveryoneAugust 11, 16
Two high-end brands – Michael Kors and Coach – announced plans this week to take back control of their accessories’ retail prices by limiting distribution, according to a report in Marketing Daily.
The two companies have become increasingly alarmed about department stores’ discounts of their products, and have decided to limit distribution and no longer participate in sales to the common people.
The whole point of luxury, as has been previously described, is that its raison d'etre is predicated upon its inaccessibility to anyone and everyone. The moment that a luxury item becomes a product available to those, whom would not normally describe as having a large amount of disposable income, it loses its meaning – and ceases to be luxury.
“It's creating confusion in the consumers' mind relative to the value of the Michael Kors brand when it's being seen so often on sale in so many different places,” said Michael Kors CEO John Idol. “We have to correct something that we think is actually having a negative long-term effect for the brand.”
That point about creating confusion in consumers’ minds is a salient and important one. It can be tempting to chase sales and allow department stores in particular, to provide opportunities for those not usually associated with luxury purchases to enjoy a chance to participate, but it comes at a steep cost of the dilution of brand identity – weakening its cachet.
Ralph Lauren is another luxury brand that has baulked at the heavy discounting occurring with its products. According to its CEO Stefan Larsson, they are working with retailers to improve the quality and design of products, as well as streamlining the number of styles – the hope being that more items can be sold at full price. Although he did acknowledge that many luxury groups are facing retail traffic headwinds.
But this is not just an issue about luxury brands and department stores’ price cutting – it is also about the future of malls, following dwindling foot traffic. Consumer’s shopping habits are evolving and changing, and the traditional department store is struggling to keep up. Shoppers still want the tactile and sensory experience of being in a physical store, but the offline shopping experience needs to be more closely allied to the online one.
From the luxury retailers’ point of view, the desire to reaffirm their position as aspirational brands, available to a relatively small number of people, makes a lot of sense. If luxury is to mean anything, it shouldn’t be available to everyone – and it certainly should not be heavily discounted, because as results have shown, higher sales do not always transfer to increased profits.