New report on global luxury goods
The 4 Ps of Marketing
Alliance Bernstein released the June 2022 edition of the Price Discipline Index, a partnership with RE Analytics (data provider of Data Boutique) that started in May 2019 (we’ve just passed the three-year mark🎂).
What I like about this research, is the use of price data to infer information on the product, place, and promotion, which, together with price, build the four Ps of marketing.
While product and price dimensions are discussed more in-depth in other research (like this one), I like the way “place” and “promotions” are treated here.
This is exactly the value we want to deliver with DataBoutique: It’s not only about price, it’s what more you can learn from price.
In an e-commerce economy “place” is the distribution channel. A brand can be positioned very differently from website to website (read “from channel to channel”). The “Nike” brand you can find on nike.com is a sports brand for every person, with sports at its core. The “Nike” brand you find on Farfetch.com instead is a sneaker-head luxury product brand that can easily offer a limited color edition of a basket shoe for the price of a BMW Series 1.
If you want socks for less than 10 USD, just browse Amazon.com.
Same brand, different place.
Promotion as discounts. Besides being the core of the Bernstein report, promotions are used to reveal the strengths and the weaknesses in the relationship between brand and channels (websites).
Promotion is a “channel event”: It incentivizes customers on that specific channel. So in a multi-brand distribution world, it’s a battle among peers. Retailer A pushes promotions to beat Retailer B, and they both sell Brand Z. Brand Z is happy either way.
But since brands started distributing on their direct channel (direct-to-consumer, or DTC websites), Brand Z is a supplier and a retailer, with the extra weapon of threatening supply reduction if Retailers A and B keep on making promotions (which would damage Brand Z DTC).
So Brand Z tries to force A and B to stop promoting, and by merely looking at promotions, you can measure who has the better negotiating power.
Takeaway: Price is not about price
Simply put, don’t just seek price insights in price data. Price is the ultimate indicator of many factors, and is the point where the brand meets the distribution to meet the consumer.
To access price data, join this substack, it’s the first point of contact with us. September is coming soon, and by the end of that month, we will start allowing beta testers. Stay tuned!