CHANEL Price Cuts Are Crucial

Today, Chanel seems to be in no mood to continue this surprise game.

Despite the announcement of the price cut, there were comments that fear of price cuts would damage the brand image.

But the Chinese market analysts of some consulting firms have endorsed Chanel's global price adjustment strategy that came into effect on Wednesday.

Smith Street Solutions's consumer and retail director James Button told the women's Wear Daily that Chanel's price cutting measures have attracted much attention. As a price forerunner in the luxury goods industry, it will enjoy the benefits of strategy first.

In Shanghai's high-end shopping mall, Hang Lung Plaza, Chanel, C e line, Dior and many international brands generally say they welcome price adjustment.

A 32 year old white-collar female shopper who was shopping was interviewed by the women's wear daily. He said, "I love Chanel.

If there is only about 5% difference, I think there will be more people buying Xiang Nai later in China, so they won't have to wait for friends to bring them back when they travel abroad.

On her hand was a Chanel 2.55 classic flip bag bought from France.

"We are in a pparent world and consumers are not stupid. They can see that the price of Chanel in China is two times higher than that in Europe.

Because people travel, they go to different countries, and they look for the best prices.

British fashion business news website Business of Fashion founder Imran Amed told the interface news.

Amed thinks Chanel's price cut is a wise move. "This is a long-term strategy. Chanel is not cutting prices. Its strategy is only to achieve global price consistency.

This may lead other brands to follow suit. "

Almost all luxury brands have to face strong and imitated markets in China.

The Wall Street journal believes that this move will keep Chanel's brand value in the long-term development and make the grey market panic.

But the risk is not too small, because Chanel is really hurting its short-term profits, which may give the company and even the luxury industry a lot of pressure. Chanel must take into account that the growth in China's sales volume can not make up for the cost of the price cut, and this is likely to hurt the enthusiasm of consumers in the European market.

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For other brands, the future is not clear. This will depend on how they view China.

And what is their own market strategy?

Button said, "there is a phenomenon that some brands only regard Chinese stores as showrooms for products, so you have to make sure that it is worthwhile to bring consumers back to China.

In this case, price adjustment is of great significance.

But if consumers continue to shop overseas and China is only exhibiting goods, then the price adjustment is of little significance.

This involves different brand retail strategies. "

"Many brands may have to unify their prices one day."

Jean Claude Biver, a manufacturing director of the watch industry, told the Wall Street journal.

At present, the price of Gucci in Beijing is 82% higher than that in Paris, while the price of LV in China is 65% higher than that in France.

Besides, they also need to spend their minds in dealing with the chaotic electricity market.

Therefore, luxury is the time to rethink its pricing strategy, especially in the era of luxury depreciation.

Luxury makers who used high pricing as the most important way to guarantee the image of the brand are the highest in the world in Hongkong and Mainland China.

This is the truth confirmed by Morgan Stanley analysts, but their oil and water are draining away, partly due to the progress of the Chinese government's anti-corruption process.

A luxury manager from another French fashion brand has revealed that he would rather starve to death than learn Chanel to cut prices.

Whether bold Chanel or conservative brands, the idea of simply relying on high prices to run brands has been able to reverse.

In the past century, luxury goods such as Prada, Dior and so on are still attracting consumers in the window with hundreds of times the display price of products in the shop. They call this price "Anchor".

William Poundstone, author of pricing, wrote that these luxury goods believed that consumers would be attracted by bait. After entering the shop, they found that the price of real goods was not so high.

This is a pleasant surprise. Prices always make people happy and worrying.