Lee, who is a VIP customer of Bvlgari in Korea, received a surprising phone call from the brand’s sales professional. The sales professional informed her that the discount benefits for VIP members would be ending next month and prices are going to increase. “If you have any plans of shopping, do it immediately before the benefit ends,” the seller advised.
“I just became a VIP at the end of last year and it’s unfair that the brand changed its policies in just over a month,” Lee said. “Though I feel bad about their attitude towards their best customers, but I am considering buying something or not because the price will increase by 15% after this month,” she added.
Luxury jewelry brand Bvlgari, which is a part of the LVMH group, will discontinue its VIP discount program from next month, according to a luxury industry report released on Feb. 19. The brand is also reportedly planning to increase prices on some of its items next month. Customers have expressed their concerns and complained that the company’s unilaterally eliminating the discount program is a sort of deception.
Until now, Bvlgari has been offering VIP status to customers who spend more than $52564 (70 million won) and provide a 7% discount on their next purchase. If the cumulative purchase amount was more than $150 thousand (200 million won), the discount was 10%. In case of buying at department stores, the brand offered an additional 3% discount for clients paying in cash, which was analyzed to have attracted loyal customers and boosted sales.
However, Bvlgari reorganized their membership benefit program early last year based on “purchase performance within two years,” and again in this month, it is reported that the brand notified their customers that it would completely end the program.
Experts have criticized the program as consumer deception.
“It is understandable to revise customer benefit programs according to brand policies, but this kind of unilateral and unpredictable change may violate consumer trust,” said Kwak Eun-kyung, executive director of Consumer Watch, adding that “sufficient advance notice is necessary so that consumers can respond to the changed policies.”
The industry sees Bvlgari’s abrupt policy change as a sign of the crisis in the luxury goods market. The luxury goods market, which grew rapidly fueled by retaliatory spending during the pandemic, is experiencing a decline in demand due to a combination of the endemic and the economic recession.
In Korea, sales of luxury goods in department stores, which had been growing at double-digit rates, fell to near zero last year.
