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Selling Luxury Through Texting

Motorola Razr

Motorola Razr

DALLAS, Dec 19, 2007 / FW/ — Have cell phone; will find bargain! An interesting New York Times article, ‘A Quicker Resort This Year To Deep Discounting,’ mentioned that online luxury retailers Ideeli, Overstock.com and Bluefly.com use text messages to inform their loyal customers that new merchandise had come in.

This phenomenon might just be an offshoot of the lucrative holiday season or the fact luxury items are not selling in the department stores, but selling fast when deeply discounted.

There are two observable facts in the New York Times article: (1) the use of text messages to inform customers; and (2) deeply discounted luxury items are selling like hotcakes.

The first one – selling through texting demonstrates that we truly live in a wireless world; that mobile phones are truly ubiquitous and mobility is a need not a want. Silicon Valley denizens predicted this when WAP 1.0  (Wireless Application Protocol) was just being developed. But, texting to sell is something that probably did not enter the programmers’ minds as one of the uses of WAP.

Yet, it is a development that is not a surprise at all. After all, we can surf the web via our cell phones, download music, and play games, so why not do some shopping also? We already have twitters wherein friends can leave us text and voice messages from websites. Your favorite e-tailer sending you a message that an item in your wish list is available is so natural after all these.

Currently, only the internet discounters are using text messages as a selling tool, but don’t be surprised that in the near future, mainstream retailers from Target to Neiman Marcus will use it.

The second one – deeply discounted luxury items are selling like hotcakes, is almost a no-brainer. Everyone loves a bargain. If a high-end bag like Valentino or Christian Dior is selling for half price, it will be snapped up as soon as it hits the shelves.

Yet, this is also a symptom of the eroding U.S. economy and the uneasiness of consumers to pay full price for luxury items. According to the New York Times article, the reason why the discounters are getting more merchandise compared to last year is because the department stores did not reorder, hence manufacturers are forced to go through their secondary sellers to move the stock.

So, the question is – why are luxury items selling at full price not selling in department stores when last year, they did?

Is it because consumers are just skittish about the economy? Are luxury items, which are usually made in Europe priced too high currently because of the euro/dollar exchange rate? Or, luxury items just priced too high, period?

These questions can only be answered by an in-depth study of the luxury industry. Yet, using a layman’s point of view, I believe the answer is that it is combination of the three reasons mentioned above.

[MARI DAVIS]