NEW YORK, USA - Luxury buyers often spend weeks biting their nails in anticipation of the day when the Chanel private sale event arrives.
Once or twice a year, some customers receive invitations to make appointments in boutiques and department stores to buy the previous season's shoes, jewelry, ready-to-wear, scarves and accessories at 40% off.
Those who are not on the VIP list should hope that pearl brooches, tweed blazers and square pointy-toed heels that are rarely discounted will still be available when the sale is open to the public. In department stores, vendors do not always indicate which jewelry and accessories are marked. Therefore, if you don't know, you may miss it completely.
This kind of secrecy creates a frenzy, said Hayley Corwick, the blogger behind the Madison Avenue Spy fashion website, who has been tracking fashion rebates and sample sales for more than a decade. Chanel declined to comment.
"The Chanel sale is one of my biggest traffic drivers because it makes everyone go crazy," said Corwick. "It's word-of-mouth and the sellers are also very strict about publishing online, so everyone falls on their face to get in and see what they can buy. »
Chanel's reduction strategy would be difficult for most brands to replicate - few can count on the same fervor from their customers. Many labels take the opposite approach, offering near-continuous sales that can increase revenues, but at the expense of profit margins and reputation. This year-round sales strategy has only worsened during the pandemic, as companies are increasingly desperate to move unsold inventory during spring lock-ups.
But maintaining the right kind of sales can also increase profits and excite buyers. Now that fashion consumers are hesitantly returning to stores, it's crucial that brands discover how they can make their sales events happen. Retail and shopping experts say it is an art to balance frequency, price and merchandise.
Selling once or twice a year
In fashion, "the well was poisoned" by the shed, said Michael Solomon, a consumer behavior consultant who has worked with H&M, Levi's and Under Armour.
"Holding constant sales events is a short-term strategy that will give a brand a very short shelf life," he said.
Launching constant sales events is a short-term strategy that will give a brand a very short lifespan.
Dawnn Karen, fashion psychologist and brand consultant, said that companies would be better off holding discount events several times a year. Net-a-Porter, for example, holds a semi-annual sale. Glossier holds a major sale every year during the Black Friday weekend. The online forums are filled with make-up enthusiasts who boast about their annual harvest.
"Consumers are more inclined to spend when there is a sale that seems rare," Karen said. "It creates an adrenaline rush to push them and buy now. »
Brands that are not disciplined in sales also force buyers to spend less, Karen added.
"They have less power because buyers know the discounts will always be there," she said. "They won't trust the store to deliver one-time savings. »
Selling once a year, but not really once a year
Some retailers try to play both ways, holding frequent sales but marketing a few as must-see events.
Consumers are more inclined to spend when there is a seemingly rare sale.
Nordstrom's anniversary sale is highly publicized every August. The retailer can see a peak of up to 80% traffic on their website during the event.
The Seattle-based department store chain offers numerous discounts throughout the year. But it still heavily markets the birthday sale as an extravagance once a year - Adweek has even dubbed it "the Super Bowl for Fashion Influencers" because so much is published about the event in order to earn commission.
"It's the kind of event where people circle the date on their calendar," said retail expert and author of The Nordstrom Way, Robert Spector.
Amazon Prime Day follows a similar model. The site offers thousands of deals every day, but customers spent more than $7 billion on last year's sale. This year's Prime Day has been postponed and Amazon has not yet announced the date of the sale.
Give special access to sales
The private sale of Chanel is designed to play on consumers' desire to feel like part of the crowd," said Karen.
"It makes buyers feel like they've been selected, like they're part of a group," said Karen. "There's a sense of euphoria with this type of access. »
This gives buyers the impression that they have been selected, as if they were part of a group.
Brands use a variety of tactics to make a sale exclusive. Saint Laurent has sent passwords to some buyers to gain earlier access to discounts. Shoe brand M.Gemi held a sale in March during which the brand informed customers on its mailing list or who were following its accounts on social networks. The sale was not private, but some buyers were notified in advance.
Solomon said the promise of access can foster buyer loyalty, which ultimately contributes to a retailer's bottom line. He highlighted the 80/20 rule, where for many brands, 80% of sales come from just 20% of customers. Exclusive buying events convince these key consumers to spend more.
"It's more expensive to attract a new customer than it is to retain an old one, and companies should tend to look to loyal and existing customers," he said. "The more you reward these customers, the more powerful their purchases will be. »
Nordstrom is playing with this tactic by giving credit card holders early access to its anniversary sale. The company will even close certain areas of the store during its pre-sale event.
The more you do to reward these customers, the more powerful their purchases will be.
Customers will see through attempts to fake exclusive access," said Solomon.
"You can't just send a mass e-mail to everyone and tell them they are special buyers who get discounts," he said. "You always have to preserve the integrity of that feeling. »
Offering discounts - and merchandise - that are really worth it
The most important factor in organizing a sales event is to have one that is really worth buying.
"Buyers do their homework, and they won't just buy items that have a small markdown unless there is real value," said Corwick.
Solomon said offering discounts that buyers can't refuse is especially important during the pandemic.
"People are sitting at home, between surfing zoom calls, so price transparency has become an important element in attracting consumers to your buying event," he said.
Buyers do their homework, and they won't just buy items that have a small markdown unless there is real value.
The same goes for the goods that buyers will actually want to buy. Spector believes that one of the main reasons Nordstrom's anniversary sale is so successful is that it offers discounts on new items.
"It's the reverse psychology of a sale," said Spector. "Nordstrom takes fresh produce, not the end of the season that they couldn't sell because that's what people want to buy. »
Solomon added that the inclusion of old inventory at highly marketed sales events could also deter buyers.
"You will lose credibility because people's BS detectors are pretty sensitive right now," he said. "You have to walk the walk and talk. Sell what is really in demand. »
