Price increase, a boon for luxury resale?

We wrote less than a month and a half ago about Chanel’s first price increase of 2022. Would you believe it, Chanel has pushed up price tags again, in the first week of March? Ouch!!
 
Chanel has accelerated the pace of their price increases since 2019. Prices have been driven up because of reasons that are both, strategic and operational. Strategic price hikes stem from Chanel’s vision to position themselves as the most luxurious, most desirable personal luxury brand on the market. Operational reasons have been implemented to tide over the escalation in supply chain costs, surge in manufacturing expenses and inflation. Upon factoring in the five price increases since 2021, Chanel bags cost nearly twice as much as they did in 2019, before the pandemic began.
 
Major luxury brands have raised prices consistently since the start of the pandemic, successfully defying the most fundamental law of economics – The Law of Demand. Louis Vuitton bumped up prices by up to 30% less than a month ago, Dior pushed through a price increase of 8% this January.
 
Chanel is conscious of discontent from luxury aficionados and has addressed their concerns on the heels of the latest price hike. Let us do a deeper dive. This price increase has been positioned as a “price recalibration”, in keeping with the maison’s Price Harmonization Policy. The brand seeks to reduce price gaps between regions, to enforce a price variance of no more than 10% from region to region. With this move, they aim to combat any profiteering from price arbitrage and curtail the burgeoning parallel market. The impact at the retail level is that consumers can bid goodbye to the notion of living in one part of the world and shopping in another, Europe for instance, to benefit from lower boutique prices or VAT refunds. The harmonization strategy fits in like clockwork with the recent upsurge in prices, which was witnessed in Europe, parts of South-East Asia & Oceania and Canada. Markedly, China has been left out of the price increase, so as to not ruffle feathers of the luxury loving Chinese and to bring them at pricing parity with the rest of the globe.
 
Does this augur well for the pre-owned luxury resale market?
The increasing price of personal luxury is fueling a paradigm shift in consumer mindsets. While the investment value of top tier luxury is increasing, fashionistas too, are perceiving pre-owned luxury as a credible alternative to the increasingly out of reach brand boutique, both from an availability (read artificial scarcity) and affordability perspective. The stereotypical stigma of “pre-owned personal luxury pieces” is being snapped. You do not have to break the bank to fulfil desires, do you? We have experienced cases where some of our sellers have received payouts for their luxury items that were higher than their original purchase price years ago – factors such as desirability, scarcity and price increases over the years, all came into play!
 
Chanel is one of our top selling brands and we will continue to delight our community of buyers by offering guaranteed authentic desirable, new and pre-owned pieces at great discounts!!  Check out The Chanel Edit at www.theplushposh.com to explore our alluring Chanel collection.