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Jimu News reporter Zhang Xiujuan

Interns: Liu Peilin, Chen Yanyu, Cai Yaqing, Yang Jiachun

Recently, the Wall Street Journal cited Bernstein data saying that luxury brands Burberry and YSL are trying to win back consumers' hearts by lowering prices. As soon as the news came out, it became a hot search on multiple social platforms and sparked heated discussions. On August 19, Jimu News reporters visited several brand stores in Wuhan and found that even on weekdays, there were many customers queuing at the door waiting to enter the store. Regarding the rumors of price cuts, the official customer service of several second-tier luxury brands said, "We have not received any information on product price adjustments at present."

A brand store clerk told the reporter: "We are doing periodic seasonal discounts recently, and some products are being discounted, so sales will increase a little bit."

Multiple stores in Wuhan deny rumors of price cuts

On the afternoon of August 19, at the entrance of the Burberry store in Wuhan SKP, some consumers were queuing in an orderly manner waiting to enter the store to make purchases.

"I saw news online that several types of bags have been reduced in price, so I want to come to the store to check out the prices. If the prices are right, I won't plan to find a purchasing agent," said Ms. Li, a citizen.

The Burberry clerk who was serving the customer said: "There are currently no price reduction activities."

Many customers come to buy at the Burberry store (Photo by Chen Yanyu)

The reporter then called Burberry's official national customer service hotline as a consumer to inquire about the price reduction of the product. The customer service responded: "We have not received any news of product price adjustment. The company's price adjustment is a company strategy, and product price changes are normal." Regarding the price change of Burberry's medium Knight bag, which was circulated online, the customer service responded that "at present, we can only see the price on the official website. This model was adjusted in the spring of this year, and the price was reduced by about 3,000 to 4,000 yuan. The current price is 22,500 yuan."

Has YSL (Yves Saint Laurent), a luxury brand of the same level, reduced its prices? According to a YSL clerk, "Our product prices have not changed at present, but because SKP is a new store, users can get 3 coupons after registering as SKP members, and the transaction price when purchasing will be slightly lower than that of other stores."

"We have periodic seasonal discounts every year, but only for some products. For example, out-of-stock shoes will be half price." A Tory Burch clerk told reporters, "Due to the decrease in unit price, sales will increase a little bit." The reporter noticed that at Bailian Outlets, some Tory Burch bags and shoes are on sale. For example, a printed silk dress with an original price of 9,850 yuan is now only 4,920 yuan, and the KIRA woven mini handbag is half price. There are also discounts on a variety of flat shoes, earrings, and sweaters. The popular micro bucket bag has also dropped from 2,990 yuan to 2,090 yuan.

Price adjustment reflects brand differentiation strategy

Light luxury brands are reducing their prices, are there any chances that top luxury brands will reduce their prices? In response to a recent online rumor that a shopping mall in Wuhan was offering a 15% discount on LV, the reporter asked LV's official customer service, who replied, "We don't have this promotion and we never reduce prices."

A clerk at an LV store in a shopping mall told reporters, "The mall was actually running a 10x points campaign some time ago. Some customers didn't want mall points and may have gotten cash back through other channels." "For first-tier luxury brands, it's good enough if they don't see a crazy increase in price." Ms. He, who has been running a Korean purchasing agency for many years, told reporters, "The price of LV's more popular Carryall medium handbag increased in February this year, from 20,500 yuan to 21,500 yuan. There was another wave of price adjustments in July, and the current official selling price is 21,800 yuan." She said that LV has been raising prices every year, with an increase of about 6%.

"Some light luxury brands and second-tier brands hold a lot of price reduction activities every year to increase sales." In the circle of friends of Ms. Li, a purchasing agent, promotions for Burberry's classic trench coats and shirts as well as some bags have been released recently, with some items being discounted as low as 50%.

Shirt purchasing service up to 50% off

Consulting firm Bernstein once said that Burberry expects more than 50% of its profits to come from discount sales. "Brands like these have already entered outlets and have Black Friday promotions, so why bother going to the counters to be ripped off?" said Ms. Jin, a resident. Bai Xueman, who has been engaged in luxury goods research for a long time, believes that "although entering the outlet village can help companies recover, it also invisibly damages the brand image."

"First-tier luxury brands maintain their high-end market positioning by raising prices, while second-tier luxury brands reduce prices to attract a wider consumer group, which reflects that the luxury market is becoming more segmented," said Bai Wenxi, vice chairman of the China Enterprise Capital Alliance. "The price cuts of second-tier brands may be a response to the current economic environment and changes in consumer purchasing power, reflecting consumers' increasing attention to cost-effectiveness and practicality."

At the same time, Bo Wenxi believes that consumers' perception and acceptance of luxury goods are also changing. As market education deepens, consumers may view the pricing and value of luxury goods more rationally. "With the development of digitalization and e-commerce, consumers can more easily compare prices of different brands, which may force some brands to reconsider their pricing strategies."

(Source: Jimu News)

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