Even so, Tiffany has lowered prices on diamond engagement rings about 10 percent, hoping to cultivate a lifelong relationship between the prospective groom and the Tiffany brand.
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“It’s heroin,” said Paco Underhill, the author of “Why We Buy: The Science of Shopping” and the founder of Envirosell, the retail research and consulting firm. “The more you do it and the more ways you do it, the harder it is to stop.”
That was last autumn, and in the months since, he has been inundated with similar discount offers. If a salesman does not make one, he has learned to ask.
“In another market, I would have found it very inappropriate” to ask for a discount, said Mr. Stuart, a bankruptcy lawyer who works in New York and Chicago. “In this market, I’m finding it incredibly appropriate.”
Tiffany conducted customer research that shows its shoppers would be loath to see the chain, founded in 1837, offering 20-percent-off charm bracelets and pearl earrings.
Of course, many luxury retailers have long offered discreet discounts to their top customers. Sales associates at luxe department stores were typically empowered to give discounts of about 10 percent to customers spending upward of a certain amount of money, usually $20,000 or $25,000.
Customers who subscribe to e-mail messages from Neiman Marcus, for instance, are regularly invited to “midday dash” sales. The two-hour, online-only sales promise 50 percent off luxury goods that can be bought only by clicking on a link in the e-mail message. Customers learn about the sale mere hours before it begins. This week’s “dash” featured a $697 Burberry handbag, marked down from $1,395. A Carmen Marc Va *** o chiffon gown was $575, down from $1,150. And Cole Haan flats were $82, down from $165.
More and more, the action is on the Internet. “Not so long ago, many of the luxury brands saw it as a mass vehicle,” said Gregory Furman, founder and chairman of the Luxury Marketing Council, an industry group. Now it is not uncommon for retailers to send e-mail messages like the one Bloomingdale’s sent in April to its subscribers: “Today only! Take $500 off your regular-priced online purchase of $1,500 or more in Mens.”
Another advantage of secret sales is that they require little or no advertising, so stores can privately cut deals with customers and publicly maintain that they do not discount their brands.
At Tiffany & Company, executives contend that sale signs would clash with the jeweler’s reputation for timeless quality, symbolized by its signature blue boxes. “We certainly don’t engage in price promotion,” Mark L. Aaron, the company’s vice president for investor relations, said in an interview.
Scott Stuart was at the Bloomingdale’s store in Manhattan when a salesman sidled up to him, said a private sale was under way and offered him a discount on the slacks he was inspecting.
“It gives them plausible deniability,” Ms. Martin said. “I think that is a much better approach in luxury than what happened over Christmas.”
Such discreet sales preserve a brand’s veneer of exclusivity and help create a sense of urgency by limiting the time customers have to score a deal. Additionally, secret sales enable stores to discount their merchandise deeply without angering regular customers who may have bought at full price — the opposite of what happened last Christmas, when panicked department stores began selling in-season couture at fire-sale prices. The eye-popping discounts led many consumers to question whether all that chic merchandise was worth the high prices in the first place.
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The conventional wisdom is that the more consumers who know about a sale, the better for business. But that rule does not necessarily hold in luxury retailing.
“When you’re selling anything in luxury,” said David A. Schick, a managing director and retailing analyst with Stifel Nicolaus, “you’re selling exclusivity.”
In this economy, however, the discounts are “more in-your-face,” said Stacey Widlitz, a retailing analyst with Pali Research. Moreover, they are steeper than in the past and available to customers spending far less than $25,000.
Rather than put up percent-off signs, Neiman Marcus uses e-mail and its Web site to advertise deep, but brief, discounts.
Yet while covert sales are a subtler way to move merchandise, many industry professionals say they think today’s culture of nonstop sales, secret and not, is further hurting the luxury business.
Neiman Marcus declined to discuss the “midday dash” extensively for competitive reasons and because it is still testing the promotion. But the retailer said that so far it is pleased with the results.
Mr. Stuart is among the many consumers in this economy to reap the benefits of secret sales — whispered discounts and discreet price negotiations between customers and sales staff in the aisles of upscale chains. A time-worn strategy typically reserved for a store’s best customers, it has become more democratized as the recession drags on and retailers struggle to turn browsers into buyers.
“We say, ‘Here’s the product and here’s the price, and the price is justified,’ ” Mr. Aaron said.
Rather than post big sale signs, which can mar a store’s reputation, high-end chains are trying to unload $3,000 handbags and $800 shoes by periodically telling customers that certain items are on sale, even if the price tags say otherwise. The stores also engage in the electronic equivalent of whispering in a customer’s ear: sending select customers e-mail alerts about private online sales.
“If you were a regular luxury shopper, you felt like a sucker,” said Karla Martin, a co-leader of the North American retailing practice at Booz & Company, a management consulting firm. “If you just spent $800 on a Marni skirt and you run into somebody who spent $400, you don’t feel treated well as a customer. That was a disaster for retailers.”
