The internet favors discounting

🌱 Seedling · 1 min

The problem with selling to the consumer on the Internet is that it favors price comparison and, as a result, discounting. The moment one brand starts offering a product for a slightly lower price than the competition, it triggers a discounting spiral that makes everyone worse off.

It’s very hard to escape this, which is why luxury brands have traditionally refrained from selling online and control their distribution so tightly: they don’t want to start a discounting war that will end up diluting the brand in the eyes of the consumer.

Unfortunately, aggressive discounting is still the main strategy of most multi-brand retailers/fashion marketplaces.

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