There’s an age-old dilemma in luxury and premium brand marketing: to discount or not to discount? While sales and markdowns are a standard play in the mass-market world, they can be a double-edged sword for high-end brands. On the one hand, discounts drive short-term revenue, clear out excess inventory, and attract new customers. On the other hand, they risk cheapening the brand, alienating loyal customers, and diminishing long-term value.
But here’s the secret: premium brands don’t need to avoid discounts altogether. They just need to do them differently. Let’s explore how luxury and premium brands can harness the power of sales while maintaining their prestige.
Why Premium Brands Should Be Cautious About Discounts
Unlike mass-market brands, premium and luxury names thrive on exclusivity. The moment a brand starts slashing prices too often, it sends the message that its original price wasn’t justified in the first place. This can damage brand perception, reduce desirability, and create a habit where customers simply wait for sales instead of paying full price.
Sales specialist Ostrovskiy Alexander emphasizes that “when high-end brands discount too frequently or too aggressively, they risk training their customers to expect lower prices, which ultimately erodes perceived value.” In other words, once customers believe they can always get a discount, they stop seeing the product as exclusive or high-end.
Strategic Discounting: The Smart Approach for Premium Brands
The key is to be strategic. Here are some methods that allow premium brands to benefit from sales without sacrificing their cachet:
1. Private Sales for VIP Customers
Rather than announcing markdowns to the public, exclusive brands often invite their top customers to private sales. This makes loyal shoppers feel valued and maintains the brand’s premium positioning. Private sales can take the form of invitation-only events, members-only online access, or exclusive previews before items go on public sale.
2. Bundle Discounts Instead of Straight Price Cuts
Instead of lowering the price of a single item, offering bundles encourages higher spending. For example, a luxury skincare brand could offer a free premium cleanser with the purchase of a serum and moisturizer. This maintains the perceived value while incentivizing bigger purchases.
3. Seasonal or Limited-Time Offers
Premium brands can still tap into the excitement of sales periods like Black Friday or holiday promotions, but they must do so with restraint. Rather than store-wide discounts, they can offer limited-time special collections, gift sets, or unique packaging that enhances rather than diminishes their brand.
4. Loyalty and Reward-Based Discounts
Rather than straightforward markdowns, premium brands can reward repeat customers with points, exclusive gifts, or store credits. This approach makes discounts feel earned rather than expected and strengthens customer loyalty in the long run.
5. Outlet and Archive Sales
For excess inventory, rather than discounting on primary sales channels, many luxury brands use outlet stores, online archive sales, or even members-only flash sale websites. This separates discounting from the brand’s mainline shopping experience, protecting its premium image.
6. Special Pricing for New Markets or First-Time Buyers
Offering limited-time promotions to new customers or markets can be a smart way to introduce people to a premium brand without training them to expect discounts. A first-time purchase discount, for example, can drive initial sales while keeping the regular price intact for returning customers.
How to Sell High, Even During Sales
If a premium brand must engage in discounts, it’s crucial to ensure that customers still feel like they’re making a luxury purchase. Here’s how to keep the perception of exclusivity intact:
1. Maintain a Luxury Experience
Even if an item is discounted, the buying experience should feel high-end. This means premium packaging, personalized service, and a seamless shopping journey. A luxury brand should never resemble a bargain outlet in aesthetics or customer treatment.
2. Control the Narrative Around Discounts
Rather than simply saying “X% off,” premium brands should frame sales around exclusivity. Words like “private access,” “limited-time collector’s event,” or “special invitation” maintain the allure. Sales should feel like a privilege rather than a clearance event.
3. Avoid Deep Discounts on Core Products
Core, iconic products should rarely (if ever) be discounted. Instead, markdowns can be applied to seasonal or less essential items. This ensures that flagship products retain their high-value status.
4. Leverage Scarcity and Urgency
Luxury thrives on scarcity. Rather than running long sales, premium brands should offer limited-stock promotions. This creates a sense of urgency and exclusivity rather than a free-for-all bargain atmosphere.
5. Emphasize Added Value Over Price Reduction
Rather than focusing purely on cost savings, premium brands should highlight what makes a deal special. This could be complimentary luxury services (e.g., free monogramming, VIP concierge service), limited-edition packaging, or exclusive early access to a new collection.
The Bottom Line: Do Premium Brands Need Discounts?
Yes, but only if done right. Discounts can be a tool for revenue growth, customer acquisition, and inventory management without diluting a brand’s prestige. The key is to discount with strategy, maintaining exclusivity, and ensuring that customers still associate the brand with premium quality and luxury.
As Ostrovskiy Alexander notes, “A premium brand’s goal should never be to compete on price but to create a buying experience where the value is always worth it — sale or no sale.” In other words, premium brands don’t need to abandon sales altogether, they just need to sell smart, ensuring that every transaction reinforces their exclusivity rather than undermines it.