Why Do More And More Brands Withdraw From The Department Family And Friends Discount Scheme?

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The "conflict" between them is becoming more and more intense.

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At the beginning of this year, it announced the withdrawal of the "family and friends" promotion plan of the US Department store, no longer supporting the discount coupons for department stores, and the withdrawal from the 250 department stores of the United States to COACH. Today, brands including RebeccaMinkoff, Levis, KateSpade and DianeVonFurstenberg have clearly made clear the boundary with some department store partners -- mainly for the US market.

The coming "black Friday" also failed to ease the tension between the two.

According to reports, more and more brands are planning to withdraw from the department store's "family and friends" discount scheme.

The so-called "family and friends" discount scheme originally refers to the discount benefits offered by department stores for employees and their relatives and friends, and then extended to ordinary consumers.

Unlike general discounts, family and friends discounts are equally effective for seasonal products. The discount rate is generally around 25% off, and will be repeated several times in a year.

UriMinkoff, chief executive of RebeccaMinkoff, said, "the discount has become something that is hard to quit as a drug, which makes consumers no longer believe in full price products."

MichaelKors's CEOJohnIdol has also had a similar view. "Discounts make consumers misunderstand brand values, especially when they see brands being discounted in so many places."

As we do in the fashionable goods that replace "light luxury", we have never talked about "light extravagance". The discount can bring short-term economic benefits to the brand in a short time. This has been fully reflected in COACH, MichaelKors and KateSpade.

In a sense, the short-term benefits brought by the discount are the "short-sighted" value of Wall Street and the decisions made by the brand to satisfy investors' desire.

But in the long run, discounts, especially long and frequent discounts, are over consuming the value of brands.

For light luxury brands, frequent discounts are still killing their last exclusivity.

However, the withdrawal of brand from department stores does not mean that department stores are no longer important.

In MichaelKors, only a Macy 's department store contributed 12.7% of the annual sales of the brand, while the withdrawal of COACH from 250 department stores meant a 25% reduction in sales.

Brand image is important, but there is a risk of total abandonment of department stores because of maintaining image.

More brands are still in pition or adjustment period: at the same time expanding the proportion of independent self operated stores, re negotiating discount zones with department stores.

We have no way to know the details of the bargain agreement between the two sides. However, according to people familiar with the matter, the DianeVonFurstenberg has been withdrawn from the department store Bloomingdale 's, and the goods of KateSpade are no longer sold in the high-end department store SaksFifthAvenue.

Will this phenomenon take place at a broader level, or should it be rooted in the stronger discourse power between brands and retailers?

In the past, most brands lacked their own channels, so they needed to rely on a nationwide, large-scale retail channel such as department stores to expand. Now, mature brands already have the capital of self built stores, and self built electricity providers also have a more direct sales mode, so department stores are no longer irreplaceable.

Moreover, when the brand has a more direct way to get consumers, the more expensive department stores lose their advantages.

In essence, as an ordinary consumer, the chance of people enjoying "discount" will not be greatly reduced because "brand is not sold in department stores".

But people used to get preferential treatment in department stores, and now the discount is mainly achieved in the direct channel of the brand.

If you don't believe it, you can take a look at the promotion plan of the brand official website now. The discount rate prepared by the US website for COACH, MichaelKors and KateSpade for "black five" is no less than that they used to be in department stores.