Coach Offers Discount Stores On A Large Scale And Touches On The Bottom Line Of Luxury Goods.

In 2008, the global market is facing the pressure of subprime mortgage crisis. Besides the Chinese market, the global demand for luxury goods is weakening. In 2009, the luxury brand appeared an unprecedented collective price cut in the mainland of China.

Various phenomena make Coach The global chairman, Lew Frankfort, has come up with new thinking that the economic crisis will be consumer spending habits. He decided to permanently change the pricing strategy and reduce the average price of the Coach package by 15%.

This bold move has brought good news to Coach. Others in fiscal year 2009 Luxury brand While sales continued to decline, Coach achieved a net sales of $3 billion 230 million, an increase of 1.6% compared with 2008.

Since Coach's first flagship store landed in Shanghai in April 2010, the site selection principle of Coach has not changed. As a result, consumers are easy to place the Coach in line with the top brands.

But unlike traditional luxury goods practices, Coach does not choose to launch new products on a quarterly basis, but tries to update it every month, and ensures that the number of new products that the store changes every month is about 20% of the total volume.

In addition, Coach's large-scale discounts have also touched the bottom line of "no discount". Coach found in the market research that the stores and discount customers are not the same, so Coach has created different product lines for two channels respectively.

In fiscal year 2011, the contribution rate of Coach discount stores to total sales has reached 40%.

What Coach does seems to be unreasonable, but in fact it all stems from some other self positioning of "luxury goods at hand". At the same time, it distinguishes Coach from the medium priced fashion brand, and finds its position between the extreme niche and the vast number of consumer groups.

In recent years, this new luxury style represented by Coach seems to have touched Giorgio Armani, too. Hermes And other traditional brands, they have tried to launch their own sub cards to attract more sensitive young consumers.