Definitely some people were able to use pandemic-related relief programs in these ways, but it certainly wasn't THE reason driving Chanel's increase/subsequent complaints as the person I was responding to suggested. That person was looking for an excuse to spread their "subtly" politicized views on the pandemic and poverty. Beyond that, NYC really isn't a good case study for any given trend...it's an anomaly, not a norm.
Are we being unfair to Chanel re prices?
- Thread starter Young1987
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Dallas too, there were lines around the mall for Gucci and LV, our SA at Ferragamo said he was getting a lot of that there as well.
DC area as well. I heard from multiple SAs I know that this was the case at the boutiques and the Saks/Neimans in Tysons corner.
Thing is, it doesn’t even matter if we are fair or unfair to Chanel’s pricing, or quality, or retail policy, you name it. Whatever comments people make, these are just subjective opinions of someone on Internet, they don’t even have to be fair.
Super Dacob made a brilliant point in his recent video saying that luxury brands have a sorta fossilised approach to social media, they are so keen to protect their exclusive right to define their narrative they don’t accept any dialogue with other people, and that they should learn letting it go. That’s why I find it kinda funny when people bring up beat up to death/repainted classic flaps or repurpose package ribbons for towels and hair clips They need to learn letting it go, or alternatively learn working with feedback, but that’s not Chanel’s thing so
Super Dacob made a brilliant point in his recent video saying that luxury brands have a sorta fossilised approach to social media, they are so keen to protect their exclusive right to define their narrative they don’t accept any dialogue with other people, and that they should learn letting it go. That’s why I find it kinda funny when people bring up beat up to death/repainted classic flaps or repurpose package ribbons for towels and hair clips They need to learn letting it go, or alternatively learn working with feedback, but that’s not Chanel’s thing so
It’s interesting to see what people mean by « unfair » with price increases. Because it inherently implies that prices, somehow, should be ethically fixed in regards to the means of all or the largest amount of consumers. But it’s just not and never was the case.
A medium CF at 1650 USD in 1990 would be today 2633 USD. But a bag at 1650 USD in 1990 just as much as it would be at 2633 USD today is out of reach for most people in America, Europe, Asia, etc. It’s a very niche world where we can be outraged that the current price increase for a medium CF from 8,800 USD to 10,200 would be somehow the straw that breaks the camel’s back?
All it means is that it’s become increasingly difficult to purchase Chanel bags at a whim for a certain tax bracket, quite possibly a life investment just for one bag for others and no real difference for the wealthiest. But that has always been the case - what people seem to be angry about is being moved down in Chanel spending power. And that has nothing really to do with appreciating the bags for what they are - that’s more a question of a perceived loss of status hurting the ego (which is something I really don’t care about - love bags for what they are, not for what they’re suppose to convey to complete strangers).
But what can be done? Luxury and fashion at the end of the day are businesses. Maximizing profits is essential for them like for any other industry. There’s nothing really to be angry about. You just have to readjust the amount of Chanel bags bought each year (and maybe this doesn’t bother me so much because I’m really not a collectionner at heart? I have many bags but I need to know that I’m wearing them, I hate having bags sit there unworn).
A medium CF at 1650 USD in 1990 would be today 2633 USD. But a bag at 1650 USD in 1990 just as much as it would be at 2633 USD today is out of reach for most people in America, Europe, Asia, etc. It’s a very niche world where we can be outraged that the current price increase for a medium CF from 8,800 USD to 10,200 would be somehow the straw that breaks the camel’s back?
All it means is that it’s become increasingly difficult to purchase Chanel bags at a whim for a certain tax bracket, quite possibly a life investment just for one bag for others and no real difference for the wealthiest. But that has always been the case - what people seem to be angry about is being moved down in Chanel spending power. And that has nothing really to do with appreciating the bags for what they are - that’s more a question of a perceived loss of status hurting the ego (which is something I really don’t care about - love bags for what they are, not for what they’re suppose to convey to complete strangers).
But what can be done? Luxury and fashion at the end of the day are businesses. Maximizing profits is essential for them like for any other industry. There’s nothing really to be angry about. You just have to readjust the amount of Chanel bags bought each year (and maybe this doesn’t bother me so much because I’m really not a collectionner at heart? I have many bags but I need to know that I’m wearing them, I hate having bags sit there unworn).
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The point I’m trying to make is the resell market being higher than rrp is likely an indication that they could still raise prices if people are still buying them ..
And yes they do take a stance on resellers. In certain countries the sa definitely don’t allow taking photos of bags because you might be a reseller. They also say the quotas are more strictly enforced there for this reason also.
Especially in the Asian market, I see daily ads for Chanel bags just bought that same day being sold for higher than rrp. Unfortunately it’s just a thing that’s really hard to stop..
I’m sure there are a huge number of considerations that go into pricing .. not saying this is the only one. Sadly I’m likely priced out for good so just gonna enjoy my one bag and keep swiping Pinterest ❤️
I can’t really think of any case in the history of ever where a price increase ever came with a change to the product that either increased utility or increased quality for the same item.
My bananas aren’t better quality now than they were last year, but they’re more expensive. A new house isn’t better quality than my old one, but costs more to build. I don’t understand why there is this reaction that says “if you’re going to charge more it must come with some increased advantage to the consumer” when it’s entirely possible that simply the brand name provides that advantage for the consumer.
In the case of the person who says “I’ll just go to Hermès then!” It’s obvious that the product being purchased was not actually just a handbag but instead it was the perception of what that handbag has to offer socially. The two brands are so different in appearance and style that the only piece that becomes exchangeable is the brand recognition and reputation.
Frankly when I look at posts nitpicking every stitch, etc and then saying “for the money it must be the best quality!!!” I think that maybe people don’t even understand how to recognize a quality leather good in the first place. If quality was truly the most important thing to the purchaser, there’s dozens of brands with comparable or better quality for less money. The only logical conclusion is that the brand is part of the equation.
My bananas aren’t better quality now than they were last year, but they’re more expensive. A new house isn’t better quality than my old one, but costs more to build. I don’t understand why there is this reaction that says “if you’re going to charge more it must come with some increased advantage to the consumer” when it’s entirely possible that simply the brand name provides that advantage for the consumer.
In the case of the person who says “I’ll just go to Hermès then!” It’s obvious that the product being purchased was not actually just a handbag but instead it was the perception of what that handbag has to offer socially. The two brands are so different in appearance and style that the only piece that becomes exchangeable is the brand recognition and reputation.
Frankly when I look at posts nitpicking every stitch, etc and then saying “for the money it must be the best quality!!!” I think that maybe people don’t even understand how to recognize a quality leather good in the first place. If quality was truly the most important thing to the purchaser, there’s dozens of brands with comparable or better quality for less money. The only logical conclusion is that the brand is part of the equation.
It's actually very logical and well-documented in economics research that when a producer/supplier is trying to increase the price of a good, consumers care most about 1) the quantity of the increase and 2) the perceived fairness of the increase. People lump "quality" into that fairness bucket. And there are many examples of companies that have increased prices and justified it to their customers by saying "you will get an improved product." Actually it's a common strategy companies use to capture consumer surplus. In the past, airplanes use to sell one seat type at the same price for everyone -- economy seat. Then, they realized they can charge more for more legroom, or a lie-flat bed, for lounge access, etc. Now they even charge more to be in an exit row. A few industries (airlines, internet companies, hospitality, etc.) have perfected the art of capturing consumer surplus by offering buyers a slightly better product or experience for a slightly higher price.
Chanel's price increases are different from the inflationary, supply chain, market supply/demand type price increase examples because prices of bananas and houses can go up AND down. The price of homes went down 25% during the GFC. They'll go down again this year. Chanel has never decreased their prices to my knowledge.
I totally agree though that Chanel is very clearly trying to be a veblen good. Time will tell if it works or how far they can push it!
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Not quite: what you are explaining in your airline example is an example of monetizing those differences as a different product. It would be the equivalent of Chanel charging you for an in store appointment, champagne, and a box + shipping bag.
Quality is associated more with brand than with the actual quality of the item. Economic theory tends to ignore this and assign a binary view in order to make modeling easier. However what it actually is about is perceived quality which can have little or nothing to do with the actual quality of the item. Further to that, often when a brand tries to use increased quality as a justification for a higher price, they are trying to sell a new product, because increasing the quality of an existing product damages the chances that a previous purchaser of that product will buy another one, even for more money. Chanel doesn’t need or want the first-time purchaser. They want the people to keep coming back again and again and again and have correctly determined that the luxury handbag market suffers network effects, where the number of other consumers of a good influences the perceived value of the good. In a market where this type of network effect exists, increasing the price without changing anything about the product is in fact one of the most common actions taken by producers to capture consumer surplus. Remember that the goal is not always the ideal price/benefit ratio for the consumer but in business it is maximizing profit to the firm.
I went into Chanel Flagship and Chanel within Neiman Marcus this week. I noticed a lot of inventory, especially in the SLGs. They even had O pouches which are always sold out. I wonder if the price increase is deterring customers from buying. One of my friends went in the morning during their first day of drop and she said there was no line. There is usually always a line on that first day. Guess we will see in upcoming months.
I think this is a combination of price increase deterring buying plus the limitations finally impinging on the reseller's ability to secure items. I noticed a lot more becoming available when the CF limits went into place. The top resellers will always have access, but the midtier now have to invest significant sums into purchasing items on the spot that they can no longer resell for thousands above retail due to the price increase.