Chanel Sensible Price Cuts Or Services?

　　 Chanel The price cuts in the Chinese market seem to have triggered the Domino effect, and one vote competitors have been unable to resist it. Burberry and Prada have made a follow up. Even the bosses are financial backgrounds, and the Swiss luxury goods group (Richemont), which is extremely sensitive to figures and margins, has moved: the largest jewelry and wrist watch brand Cartire has to provide a consistent price system around the world, and began to cut prices in Hongkong.

The price system of luxury goods always seems to be disintegrating, but can price cuts really stop the wave of offshore buying?

Not new "parity movement"

In fact Luxury brand It is an inevitable trend for the whole world to coordinate prices and narrow the price difference between China and abroad. The Chinese market is so large that all brands can not abandon China because of the European market, and all brands will adjust with their own way of recognition. This is an inevitable trend. But Chanel is undoubtedly the biggest winner. Price reduction has become an event marketing of its brand, and has promoted the brand to pave the way for its sales, "he Kiton, China Regional Operation Director and now Italy brand Tardini China partner, he bin told reporters.

In fact, before Chanel, luxury brands also worked hard to narrow the price gap at home and abroad. The reason is simple: completely upside down local and overseas sales make it difficult for those luxury brands that have opened a large number of stores in China. For example, LV has raised the retail price in the European market in recent years, but maintaining the price of the counter in the mainland is actually a "same price" movement, which will lead to consumption reflux. In addition, Yu Po table first announced the same price between Hongkong and the mainland last year, which means that the price of all products in the mainland will be reduced by 10% to 20%. But these brands or ways are too implicit or brand effect is not enough, instead of allowing the big brother of Chanel to win the market first advantage, the fact proves that later people can no longer replicate Chanel's effect.

"Chanel is bold this time. In the past, in order to maintain the luxury of the brand and the sense of honor of the guests, luxury brands kept rising prices. The brand of such a position is now directly on the star product, and it will return the luxury price of the Chinese market to the rational level. I think it is at the forefront. Lu Xiaoming, an executive of luxury brand China, is now the founder and President of organic home.

In the past, luxury brands claimed that the price difference at home and abroad was caused by China's high taxes and fees, but Lu Xiaoming pointed out directly that luxury brands were based on luxury brands. Chinese Market The high demand is also an important reason for the high price here. At present, the environment of China's luxury market is hard to support such pricing. It is the forced force in the Chinese market that Chanel and its peers have to brave changes to save the Chinese market, thereby driving global sales.

A person who works in luxury in Europe revealed that Chanel's sales in China last year at least dropped by 10%. In almost all luxury brands and group's latest earnings reports, it is easy to see that the Chinese market that used to drive global growth of brands is now in trouble.

Short board or service?

How much of Chanel's brute force and competition has forced competitors to remain passive or not? If so, how much of the price adjustment in China and Europe will continue to maintain the relative price positioning between the original and other brands, or whether the local market has changed. Whether or not the market structure will change.

"For the brand, no matter how it can not be separated from the purpose of making money. As for how to make money, the operation of each brand is different. Each brand will weigh which market is more important to itself, and everyone will dynamically adjust it. " He Bin bluntly said.

But anyway, everyone has a clear account in mind. Even if Chanel's profit margin in China will decline, it will expect more returns. By returning China's high price style to a relatively reasonable level, it can tap the consumption power of its own consumers. After all, quite a few Chinese consumers do not go abroad very often. Even for those who often go abroad, the immediacy and convenience of consumption can also stimulate small consumption potential. Look at the long queues at Chanel gate all over the country.

On the other hand, the continued depreciation of the euro and the continuous growth of Chinese consumers' overseas travel will continue to drive the growth of luxury consumption in the European market, where the prices of products continue to increase and the profits and margins of brands in Europe will increase.

It has to be said that it is wise in the long run to excavate the potential of the world's rare luxury goods consuming countries with a more professional service and perfect experience by returning the luxury price in the Chinese market to a rational level. The next step is to make up the short board. Service and experience Now.

Rhodes and Thorpe, a public relations and Marketing Research Institute, pointed out that the rapid growth of overseas tourism and overseas high quality services have prompted more Chinese consumers to buy luxury goods abroad, in the joint launch of the 2014 China luxury report. The lack of knowledge and unsatisfactory customer service in China's local market makes consumers choose overseas shopping. Up to 92% of Chinese consumers are not satisfied with the brand's service in the local market.

A senior executive in training business has told us that the service in China's luxury industry is definitely a problem. Service level, salesperson's ability and quality are uneven, especially the two or three line cities are still in the initial stage.

"Luxury goods sell well with services," Salesperson quality Too much, most consumers do not understand what they want, they need the shop assistant to dig and suggest. The salesperson who has not entered the shop simply doesn't know how to suggest. It is easy to make sales promotion with a certain skill, and it can make the guests comfortable to pay the bill. At the same time, the suggestion is really right. This is very difficult. Such a shop assistant is too few in China. The executive sighed. This poses a new challenge for Cartire, and how to use services to keep customers who are not bad money to stay at home.