The most recent recession has been a boon for deal conscious shoppers looking for discounted deals. And even luxury goods have been seeing price cuts. Here is what CNN Money says about price cutting on luxury brands:
Step into Nordstrom a year ago for handmade Italian pumps and flats from designer Anyi Lu and you’d be shelling out as much as $595 a pair. This season, everything in the spring collection that hits stores next month goes for under $400. For CEO David Spatz, adjusting prices downward simply made sense: “The days of conspicuous consumption are over,” he says.
Of course, the real question is what happens when the tough economic times are over and prices start to creep higher. Will consumers be willing to pay nearly $200 more for the same item that was discounted before? And, of course, once a luxury brand starts discounting, it runs the risk of losing credibility.
So, instead of simply cutting prices on core brand offerings, some luxury brands are adding new, lower priced lines. This way, they can maintain credibility with their core items, and then expand their reach for the sake of boosting the bottom line.
But is conspicuous consumption really over, as David Spatz contended in the CNN article? I’m not so sure. It might be over for the time being, but once things start to get good again, and once the money starts flowing again, I’m sure that conspicuous consumption will make a comeback.
Image source: BrendelSignature via Wikipedia
Post from: EveryJoe