Tuesday, 14 July 2009

The Discounting Debate Rears Its Ugly Head Again – 14/7/09

Recently we revealed the damage that heavy discounting is having upon some brands within the prestige and luxury market. But we were still surprised to read that New Delhi’s newest luxury mall has almost hit rock bottom – offering brands like Jimmy Choo, Giorgio Armani, Nina Ricci and Karl Lagerfeld at up to 70 percent off. This is a dream come true for shoppers, but a nightmare for retailers.

The man behind this heavy discounting is the CEO of the Ministry of Fashion, Yogendra Sharma. Yogendra claims to “have taken a more proactive line on marketing, offering 70 percent off across brands, but denies that it has anything to do with the market situation.” He goes on to say, “We are positioning ourselves as an aggressive player in this market.”

Hmmm, while it's good to be proactive, heavy discounting is not the best marketing strategy, or the answer to a long-term, sustainable and, need we say, loyal business.

Meanwhile, in the same New Delhi mall, other key luxury brands, such as Louis Vuitton, Hermes and Cartier, are maintaining their 'no markdown' stance. We guess that's why they have been around for a very long time – their strategies are long term and not a knee-jerk reaction to the alleged recession. They are also entering India, an emerging market, incrementally and with a considered approach. Other brands, beware, India may well be the new China, but the brands needs to gain respect from the consumer. We will say no more and let the customers decide.

Read more about this in the India Times article, Time To Go Luxe, and make up your own mind.

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au