According to Ariel: Luxury Watch Brands Should Widely Embrace Controlled Discounting
Luxury watch brands often reject discounting, viewing it as detrimental to their prestige and brand image. However, the concept of "controlled discounting" is proposed as a strategic approach where discounts are integrated into the product's pricing structure, allowing manufacturers to maintain profitability while appealing to consumer psychology. By setting retail prices as psychological anchors rather than rigid ceilings, brands can stimulate sales through calculated discounts without compromising their luxury status. The success of brands like Invicta, which thrive on strategic discounting, highlights the potential benefits of adopting a more flexible pricing philosophy. The traditional luxury watch industry has been resistant to discounting due to a culture that equates it with failure, leading to a disconnect between manufacturers and retailers. Retailers prioritize moving inventory while brands hold onto unsold watches, fearing that discounts will undermine their market position. As inventory accumulates, brands face the challenge of balancing their desire to maintain high retail prices with the reality of consumer expectations for value. Embracing controlled discounting could empower consumers and drive sales, demonstrating that well-managed discounts can enhance brand perception rather than detract from it.
