Just the Thoughts: Why do luxury goods never drop in price?

You may sometimes wonder why luxury goods never cut prices. Does this not promote the purchase of some middle-class people? Yes, of course it can, but the effectiveness of which is unknown. As savvy businesspeople, luxury goods companies must know that lower prices can attract more customers to increase revenue. For example, the LVMH (Moët Hennessy Louis Vuitton) has concentrated many high-, middle- and low-end brands. One of them is called Fresh, which often engages in discounts and promotions. So why do companies treat high-end luxury goods and low-end brands so differently? That is because some consumers are willing to publicly display their spending power to gain or maintain social status ("Conspicuous consumption," coined by Thorstein Veblen). This is a phenomenon detonated by consumerism and hedonism that prevailed in the 19th century. As some people's incomes are increasing, the consumption of luxury goods with an income elasticity of demand greater than one is also increasing. However, the price elasticity of demand for luxury goods is very low, so the price of luxury goods can only skyrocket under the control of capitalists rather than lower the prices. Yes, luxury goods companies never care about the poor income of the middle class, because their main customers have always been the really rich. For these people, luxury goods are a "necessity." Adidas has never been in their options of daily necessities. So they don't care whether the price of luxury goods is increased. On the contrary, if the prices of luxury are discounted or promoted, they will think that it is not worthy of their status and be disappointed by the brand that has reduced prices. Therefore, for product companies, the price reduction of luxury goods is not worth the loss.

The opinions expressed above are personal. Please be aware of it.