Luxury Retail and Digital Management, 2nd Edition

Chapter 15At What Price Should Products Be Sold?

Many marketing specialists neglect their pricing strategies and underestimate the effect they could have on the market.

–Philip Kotler¹

It was said in a previous chapter that pricing policies have no place in the definition of the sales point mix because it is an integral part of the product offering. In the luxury retail sector, price decisions are usually made at the head-office level and are not the responsibility of the Store Manager or even the Sales Manager. Pricing policy is therefore perceived as being of secondary importance from the viewpoint of sales outlets. However, it remains a key element in the management of a store. Even for luxury products, comparing prices with competitors, decisions on reducing prices, and calculating the rate of reductions to be granted to increase sales volumes should not be taken lightly.

In a perfect offline system, there is only one possible price strategy: the same product has to be sold at the same price everywhere in the world so that the O2O process functions perfectly no matter how one looks at it: I search for the price of an article on the brand's website in Brazil. I go to the boutique in Sao Paulo to examine it, then I go to New York and decide to buy it in the brand's store on Madison Avenue. I should be able to find it at the same price. In fact, the price should be relatively cheaper because customs duty for this type of product is very high in Brazil and North American prices ...