The price strategy is an important criteria in the luxury sector. It does not rely only on product availability, quality and exclusivity, but also on the brand value position that has been established through effective communication strategy.  This article focuses on the importance of effective pricing strategy for the luxury brands.

Does price determine the reputation of the brand?

Well the answer is yes but you can only attract the right target audience if your brand is position effectively in the luxury market. The luxury products companies show that making pricing decisions in the middle of extreme currency fluctuations is not just only on narrowing the gap to reduce arbitrage effects. Their decisions require knowledge about client behaviour and value, which can prevent unexpected consequences and keep the brand on course towards its strategic goals, including preserving the brand’s integrity. The consistency of the price around the world encourages therefore the clients to be loyal.

For instance, in 2015, Chanel raised its prices in Europe following the depreciation of the Euro. The brand did it  to avoid the flow of Chinese clients coming Europe to buy large stock as the prices were more affordable for them in Europe than China. Chanel discovered also a real inconsistency of  pricing in the Asian market. Prices for Chanel products were higher in China than to Hong Kong.

Theses events damaged Chanel brand image. Since then, the brand has put huge effort in to ensuring prices are aligned to their respective market across different continents while the brand value isn’t affected.

Does digital platforms have an impact on pricing?

The online availability of luxury products and the increased importance of digital channels indicate that attention for luxury brand pricing strategy is needed there too.

According to a report by Contactlab and Exane BNP Paribas from 2017, clients who buy luxury goods both online and in shops spend around 50 per cent more per year than in-store only clients.


Luxury brands try to converge their in store, online pricing and extend their range of products available online. Famous brands such as Fendi, Louis Vuitton, Moncler, Bulgari have all increased their online product range offering by more than 20% since the end of December 2016. To remain luxurious while operating on a global scale, it was important for these luxury brands to maintain the exclusivity strategy while maintaining a personal customer experience with clients who choose to buy essentially online.


However, few luxury brands are not following this trend. This is the case for Gucci: the luxury brand prefers to lower the quantity of their products offered online. This stock limitation is particularly associated with  two core categories: Bags and Soft Luxury goods.

To conclude, the importance of price consistency worldwide for brand value consistency goes beyond a simple conversation exercise. The rapid growth of e-commerce and the accessibility of luxury online marketplaces create a larger market scale where with greater price transparency going forward.