Premium promotions, not price cuts: how luxury brands drive retention

Whether it’s couture fashion, fine jewelry, haute cuisine, or five-star travel, luxury brands are built on scarcity, craftsmanship, and status. That’s exactly why “-20% off” banners feel so out of place in premium environments, but that doesn’t mean promotions are off the table.

Used well, premium sales promotions are a retention engine for luxury brands. Used poorly, they dilute margins and damage brand equity.

In this article, we’ll look at:

• Why luxury brands do need promotions and what’s changed in the market?
• How to design premium-first sales promotions that protect your positioning?
• Practical retention tactics for luxury and premium brands.

Do luxury brands really "do promotions"?

Traditionally, luxury players avoided discounts altogether to protect their aura of exclusivity. Today, the reality is more nuanced.

Premium and luxury brands are under pressure from:

• Intensifying competition: New DTC designers, niche houses, and premium mass brands mean affluent shoppers have more choice than ever. Switching costs are low.
• Resale & second-hand luxury: Thriving resale platforms make high-end products more accessible and price-sensitive, challenging traditional loyalty and pushing brands to offer more value beyond the initial purchase.
• Digital-first shopping behavior: Once skeptical of e-commerce, luxury brands now depend on online channels and marketplaces. Customers expect promotions, member perks, and price transparency, even in the high-end segment.

Despite this, the global luxury market keeps growing, with online luxury sales taking a larger share each year.

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So no, luxury brands don’t have to plaster sales all over their homepage. But they do need a playbook for:

• Private, invite-only promotions.
• Loyalty-driven rewards.
• Experiential incentives.
• Data-driven, margin-aware offers.

In other words: premium promotions that feel like part of the brand experience, not a clearance event.

How to retain luxury customers without cheapening your brand?

1. Design VIP loyalty programs around status, not savings

For high-value shoppers, loyalty isn’t about collecting points for a coupon. It’s about being recognized, prioritized, and rewarded.

A premium-grade VIP program should:

• Reward lifetime value, not just frequency
• Offer early access to drops, private collections, or pre-orders
• Include concierge-like services (styling, alterations, private appointments)
• Unlock experiential moments: backstage access, atelier visits, previews

Post-pandemic “revenge shopping” brought many new customers into luxury for the first time. The brands that retained them were the ones that translated that first purchase into an ongoing membership-like relationship, powered by structured VIP programs

2. Use experiential rewards as your discount

In luxury, the most effective promotion is often a story and an experience, not a percentage off. Experiential rewards can include:

• Private fittings with a stylist or designer
• Factory, atelier, or vineyard visits
• Personalization sessions (engraving, monogramming, custom blends)
• Invitations to launches, shows, or members-only events
• Access to limited collabs or “secret menu” products

Programs like HUGO BOSS Experience show how to anchor loyalty around personal service and VIP access – complimentary alterations, styling, early access, and members-only events – instead of generic discounts. The result: higher retention, higher average order value, and no erosion of perceived value.

3. Make your digital touchpoints feel as premium as your flagship store

Today’s luxury customer moves seamlessly between:

• Boutique visits
• Brand apps
• Multi-brand e-commerce
• Social channels and live shopping streams

If promotions only live in one of those environments, you’re losing retention potential. Luxury players are increasingly:

• Building clienteling apps that give associates rich customer profiles, wishlists, and purchase history (e.g., Neiman Marcus’ NM Connect).
• Syncing in-store and online offers so customers see consistent benefits wherever they shop.
• Delivering mobile-first perks, from push notifications for private events to digital wallets with membership tiers and rewards.

The goal is to make every touchpoint feel like the same brand universe, including how and where promotions appear.

4. Offer elevated gifts-with-purchase (GWP) instead of blunt discounts

For luxury and premium brands, GWP often outperforms straight discounts for both retention and brand perception.

Well-designed premium GWP:

• Feels additive (“I’m getting more of the brand”) rather than cheaper
• Encourages basket building and higher thresholds (e.g., gifts over €250)
• Can be curated to highlight new launches or hero SKUs
• Turns every promotion into a mini unboxing experience

Dior’s approach is a good benchmark: travel-size extras, iconic gift boxes, personalized messages, and sample selection with every order above a certain value. The financial incentive is there, but what customers remember is the ritual and presentation.

5. Use member-only discounts sparingly and strategically

Sometimes, a discount is the right tool, especially for reactivating lapsed VIPs, moving specific SKUs or categories, or incentivizing cross-category exploration

The key is to keep discounts:

• Targeted (only for certain tiers, segments, or collections)
• Controlled (rules on minimum spend, excluded items, or channels)
• Private (sent via app, email, or wallet – not on the homepage)

Yves Saint Laurent has introduced the YSL Beauty Club, a member-only loyalty rewards program that provides exclusive benefits and rewards. The program istructured into three tiers, each offering increasing privileges.

6. Go truly omnichannel and let promotions follow the customer

A modern luxury customer may:

• Discover a product on TikTok
• Try it in store
• Add it to their wishlist in the app
• Purchase online
• Reorder via marketplace

To retain them, your promotion and loyalty stack has to be:

• Omnichannel – the same profile, wallet, and eligibility everywhere
• Real-time – rewards and points updated as soon as someone buys
• Contextual – rules that adapt to channel, location, or brand within a group

Burberry’s Click & Collect, personalization options, and app-driven styling assistance are examples of this joined-up luxury journey where convenience enhances, rather than cheapens, the brand.

7. Align promotions with purpose and conscious luxury

Affluent consumers increasingly expect their favorite brands to stand for something. Retention-driven luxury promotions can:

• Let customers redirect a portion of their reward to environmental or social causes
• Unlock donation-based rewards (e.g., tree planting, scholarships, local initiatives)
• Tie VIP tiers to impact milestones, not only spend

The Kering Group, the owner of renowned luxury brands like Gucci, YSL, and Balenciaga, has shown its dedication to sustainability and social justice by announcing their 2025 Sustainability Strategy. The plan establishes clear goals for reducing greenhouse emissions, enhancing resource management, and ensuring fair labor practices throughout their supply chains.

Retention-first promotion playbook for designer and luxury brands

For luxury customers, standard discounts, like 10% off, are not enough to grab their attention. Instead, the focus should be on creating lasting connections with VIP experiences that resonate with sophisticated audiences.

Here are a few strategies for luxury brands to retain customers and foster long-term loyalty among high-end customers:

1. Be creative in the media

To meet changing preferences, brands are embracing social media, offering real-time behind-the-scenes content, making fashion shows inclusive beyond exclusive audiences, and featuring popular bloggers in event front rows for live coverage. While the online brand experience varies from in-store, brands use diverse strategies to craft a compelling digital presence.

For example, Dior's "Dior Eyes" VR set allows users to go behind the scenes of their exclusive fashion shows. Virtual reality is entering haute couture, enabling brand enthusiasts to admire top fashion shows.

2. Embrace NFTs as incentives

In the ever-evolving realm of luxury retail, staying ahead demands innovative strategies. Non-fungible tokens (NFTs) have emerged as a potent tool, particularly within the luxury sector, where exclusivity matters. These unique cryptographic assets, residing on the blockchain and representing digital files, align with the luxury ethos of individuality and rarity.

Luxury brands are quick to recognize the allure of NFTs, incorporating them into their arsenal for customer retention. A good example is Clinique, which used NFTs as rewards for its Smart Rewards members. By offering the opportunity to win free products for a decade and exclusive NFT artworks, Clinique not only acknowledged and enhanced customer loyalty but also attracted new patrons in a smart way.

Much like how a VIP loyalty program became pivotal in responding to the "revenge shopping" trend, the integration of NFTs signals a forward-thinking approach to customer retention.

3. Base your promotional ideas on data

Data-driven decision-making is crucial for luxury brands seeking to tailor their promotional strategies. Utilize customer purchase history to understand preferences and anticipate future desires to prepare your stock. For example, if certain products or styles are consistently favored by a segment of your audience, create targeted promotions or limited-edition releases to cater to those specific tastes.

Furthermore, using data analytics strategically allows luxury brands to fine-tune their inventory and pricing strategies, enhancing the upselling of designer products. By examining consumer behavior and purchase patterns, brands can pinpoint the ideal price points that strike a balance between staying competitive and upholding the brand's premium image.

4. Engage influencers

In the past, luxury brands avoided social media and influencers to preserve their exclusive image, but the digital age has changed this. Now, luxury brands carefully use these platforms to stay relevant online. Because of platforms such as TikTok, the days of celebrities showing off products dripping with gold are long gone. Luxury brands need to move with the times, as social media influencers raise the bar higher on an everyday basis.

Take Gucci, for instance. The brand went full steam ahead with their influencer campaign by partnering with Francis Bourgeois, a  21-year-old TikToker known for his love for trains, and the videos they've released together have received a highly positive response.

To expand their audience, luxury brands should carefully select influencers who not only resonate with their brand's identity but also authentically connect with their customers. Simply hiring celebrities is not enough. To build a successful influencer campaign, it’s crucial to concentrate on influencers whose followers align with your target customer base.

5. Foster community engagement

Create a sense of community around your designer brand by organizing exclusive events or virtual forums. Invite loyal customers to participate in VIP-only gatherings, where they can interact with designers, preview upcoming collections, and share their insights. This fosters a deeper connection and a feeling of exclusivity among your customer base. Virtual forums, webinars, or live Q&A sessions can further enhance customer engagement, allowing enthusiasts to connect directly with the brand and participate in the dialogue surrounding your designer goods.

The above-mentioned promotional strategies share common elements such as:

• Tiered loyalty structures: Offering different levels of benefits based on customer loyalty.
• Exclusive member experiences: Providing unique perks and experiences reserved for the most loyal customers.
• Shift from savings to experiential rewards: Placing greater importance on experiences that resonate emotionally rather than simple discounts.
• Personalized offerings: Tailoring promotions to individual customer preferences and behaviors.
• Mobile-friendly approach: Ensuring accessibility and engagement through mobile platforms.

These elements collectively shape a promotional experience that strives to provide customers with more engaging and personalized content and rewards – experiential benefits over 10% off promotional campaigns.

Summary

As the world warms up to the charm of luxury brands, it's crucial for these high-end names to tweak their marketing game and keep customers on board. Selling luxury products comes with its challenge – how to make the customers stay?

The answer lies in a bit of smart investing in a good Promotion Engine and VIP loyalty programs. It's like adding a sprinkle of luxury to your shopping, making it personal and leaving customers feeling special and appreciated. After all, in the world of luxury, a little promotion and a dash of loyalty go a long way. It's not just about selling; it's about building a relationship that sparkles brighter than the finest gem.