Has prestige become too affordable?

First published in New Zealand Herald  8 August 2015 

When you next visit Australia, you’ll notice an inordinate number of sale signs in store windows. The retail “perma-sale” has been evident for so many years that it’s left an indelible mark on all of us as customers. It’s a wonder we buy anything at full price any more.

In combination with the very liberal use of marketing words such as unique, prestigious, exclusive, we’ve all been conditioned to view everything as a cheap and cynical marketing ploy and nothing more. Even as a marketer of many years, it’s hard to distinguish brands I want to buy and whether they are genuinely well made and deserve their prestigious reputation and price point, from the pretenders.

In retail, the sale mentality began innocuously enough with the fast moving retailers that created ranges that span weeks rather than seasons. International retailers like H&M, Zara, Uniqlo were (and still are) always on sale because their stock churns every few weeks.

The local retailers eventually followed suit in different ways. Some, like Country Road, introduced incentive programmes like Spend & Save, offering discounts on spending incrementally more in their stores. Spend $150, get $50 off; spend $300, get $100 off and so on. This was great in the early days but I would be very surprised if the effectiveness of this campaign wasn’t waning.

The problem with frequent sales is that there’s simply no reason to buy outside of a sale period. We’ve all been conditioned that if we wait a few weeks we can buy an item for its true value.

While it used to be the mass and middle market brands that followed this sale model while luxury brands stood firm, more of the traditionally prestige-positioned brands are caving in. As a customer I love this. As a marketer I think they’re causing serious long-term damage to their brands for short-term volume gains.

If I go back to Country Road, once upon a time this was considered a premium Australasian brand. In New Zealand it was priced high, located in high-income areas and catered to a small segment of the Kiwi population.

Country Road has not been that prestige brand for a long time. If that was a conscious decision to drop it a notch and follow a Zara-esque model, they’ve achieved that. But not many companies want to compromise a prestige reputation, however that’s exactly what’s happening across so many industries.

Another prime example of this is in automotive right now. Show me a so-called prestige car brand and I’ll show you a sale that’s coming up. Instead of once or twice a year, the industry seems also to be in permanent sale mode.

For brands such as BMW, Mercedes and their compatriots, all this sale behavior may stimulate volume temporarily and put the car within the reach of more people. But that sounds like the opposite of prestige to me.

When the market is flooded with once unattainable and aspirational product, it’s no longer either unattainable or aspirational.

Surely this sale extravaganza must be reaching its tipping point, though it sure is going to take a long time to un-teach this behaviour in all of us spoilt customers.

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