How the Other Half Saves

Secret sales, clienteling, and the world of discount luxury.

Roger Vivier showroom in New York City

Roger Vivier sales are especially fun if you and your friends are the only customers who know about them.

Photo by Andy Kropa/Getty Images for Roger Vivier

Excerpted from Bargain Fever: How to Shop in a Discounted World by Mark Ellwood, out now from Portfolio.

No shoe brand gets Mollie Fitzgerald more pumped than Roger Vivier. “It’s a classic look that’s not going out of style. I travel a lot and I like the fact the heels aren’t sky-high—they work just as well with a suit for a client dinner as with blue jeans,” says the Pittsburgh-based owner of a travel agency, a WASPish blonde with a weakness for pearls and an earthy laugh. “I must have 18 or 20 pairs.” French cobbler Vivier invented the stiletto in the 1950s, long before Louboutin and his ilk stepped up to start selling shoes. Today, the Roger Vivier brand is aimed squarely at the well-heeled, charging between $500 and $1,000 per exquisitely designed pair. Stateside, the brand’s distribution is exclusive, far from oversupplied—restricted to only half a dozen outlets, including its own jewel box-like store on New York’s Upper East Side.

Even Vivier, however, makes an occasional misstep, with a few pairs left unsold at the end of each season. Maybe one style was too outré for a practical American woman, or Fitzgerald and her fellow regulars just didn’t shop enough. With fresh styles looming, there’s pressure on Vivier to quickly liquidate whatever dawdling stock remains. It would never hold a clearance event, though; like many ultra-luxury brands, the cobbler is wary of reminding shoppers too blatantly that it’s blowing a discount dog whistle, one that only certain customers can hear. Rather, Vivier hosts an invisible sale, hidden in plain sight.

Fitzgerald is one of the elite few made privy to this retail speakeasy. “I get a gorgeous engraved card, an invitation to the private sale, about two days before it’s happening,” she explains. The invitation contains Mission: Impossible–style instructions. For a short time, it notes, small dotted stickers (blue for 30 percent off, red for 40 percent) will appear on the soles of certain shoes; otherwise, but for a tiny tented “SALE” card in the window (a legal mandate), there will be no mark of markdowns. It’s the silver lining for longtime loyalists like Fitzgerald. Walk-ins from the street who inspect a shoe and spot the same dot will be told it’s stocktaking (dismissive and deceptive, sure, but technically true). Calling the subterfuge “a huge pain in the ass,” one former sales assistant explains that he was asked to demur when casual passersby would dawdle or ask what the dots meant. It was easy, given the minimal evidence. “This tiny, tiny-ass little [sale sign] in the front window. You literally could walk by and never notice it.” Hopefully at least in some killer shoes.

Vivier isn’t alone. Luxury brands like this face a quandary: the new lure of mass-market appeal (and profits) versus the ease of operating the old-fashioned way, as a contained, almost cottage industry. Inevitably almost everyone, from Chanel to Dior via Prada and Armani, has opted for the former. The price for such expansion, for reaching women from Manhattan, Kan., to Manhattan, New York City, has been steep. Larger volumes carry bigger risks: Mistakes are magnified, overruns greater.

Imagine a pap snap of Paris Hilton toting a certain bag turns sales of it toxic overnight. Suddenly, no one wants to buy that purse. In such a case, where demand drops almost instantly, the increase in production volume is lethal. It means that dozens, perhaps hundreds, of the style are now doomed never to sell, or at least sell at full price. Opting to avoid the public humiliation of a mass-market markdown, such brands hold sales in secret, discreetly liquidating their upscale merchandise without damaging their PLU cachet. These events are positioned as a thank-you to existing customers rather than a desperate attempt to clear the warehouse shelves. “I suppose it makes me feel like it’s a loyalty thing. Any way to say thank you, we appreciate you,” Fitzgerald admits, glowing about the 45 percent off she nabbed during a recent Vivier blowout. “You have the feeling you’re being rewarded—the store is open to the public during those days, but you’re getting the first dibs. It’s just like elite frequent fliers are upgraded to first class all the time.”

The luxury world has even developed its own euphemism for that approach, of putting shoppers at the center of the sale: clienteling. Such glad-handed flattery is intended to prize banknotes from the notable, whether by remembering their birthdays or offering them VIP-only bargains. Many other brands have adopted a similar sale-on-the-down-low strategy to Vivier’s. For most, a simultaneous and invisible sale like that is too logistically complex, but there are other ways to limit the best deals to the best customers. Ralph Lauren, for example, hosts biannual events where markdowns begin long before the traditional, flashy signage appears. Regular customers are notified that it’s starting, so they can shop the inventory at a secret discount of up to 40 percent before the markdown becomes public—and the hoi polloi arrive to pick the inventory clean. Unlike chez Vivier, though, if an uninvited shopper wanders off the street and buys something, the sale still applies. The drop-in shopper doesn’t know he’ll get a discount, and will be surprised at the register to receive 40 percent off an item that he was already prepped to buy at full price. This makes the sale gratifyingly insiderish for regulars, and a pleasant bonus for walk-ins. After that 48-hour-or-so window, the shop launches a conventional, heavily promoted sale.

Ralph Lauren doesn’t stop there. In a touch that might be dubbed clienteling-plus, VIPs receive a card for an extra 15 percent discount. Those prices are 55 percent less than standard retail, or more than half off, before there’s even a nod to the sale to the casual passerby. Such cherry-picking is known as presale or pre-shop, and has become commonplace.

Presale started in department stores, long before luxury became a mass-market product. It was used as a practical tactic for certain lines: Space-hogging commodity items like bedding or kitchenware could be pre-sold as a markdown to avoid taking up too much space on the floor during a sale’s busy first few days. Inevitably, of course, the lure of financial front-ending was too great. As luxury clothes and accessories took up more and more selling space, presale spread to that section. Once department stores were offering it on brand names, the marquees’ own boutiques quickly adopted the same tactic.

Now personalized pre-shopping has become standard—at least for lucrative loyal customers. “Of course we did private sales,” confesses a former personal shopper at Saks Fifth Avenue, who worked at the store’s New York flagship for seven years but would speak only anonymously. He would call his regulars, who could shop in secret for the seven days before the sale began, and purchases would be set aside and rung through as soon as the signs went up. Insiders admit that Gucci offers a similar, unstated service, as does Hermès. An ordinary shopper can join this elite quite simply: Target a staffer at any given store, chat with them, and visit regularly. Buy their affection with a couple of pieces at full price (sales commission is their raison d’être) and exchange business cards. A phone call or email invite should follow by the end of that season—and if it doesn’t, it’s time to try another sales assistant.

If a big spender doesn’t nab a must-have item before the official sale, it’s unlikely that it will linger long enough to be marked down, at least in department stores like Bergdorf Goodman. One former floorwalker confides that employees snap up the best pieces before customers can even see them. “They hide them—they’re not allowed, of course, and it could get them fired. The security room is like the FBI, hundreds and hundreds of cameras.” He pauses, then continues, “But the people policing this are doing the same things.” (Such restrictions aside, Bergdorf treats its staff especially well, deeding a courtesy lifetime discount to staffers who log at least a decade’s service at the store.)

Some stores go even further. They don’t use discounts as a discreet tactic at season’s end, but rather as a shadowy strategy to keep the right people shopping there year-round. Clothing boutique Intermix, which resembles the inside of Kate Moss’s closet, full of girly must-haves from the likes of Rag & Bone, Vanessa Bruno, and Thakoon, quietly sends a 15 percent discount card to its 1,000 most free-spending regulars, offering them a year-round thank-you (and, of course, motivating them to spend even more).

One freelance personal shopper reports that both Barneys and Bergdorf Goodman offer a professional courtesy discount of 10 percent—a margin she can choose to pass on to clients, or simply pocket the difference. And Bloomingdale’s has a bargain program, too. It’s restricted to its four flagship cities: Chicago, Miami, San Francisco, and its two stores in New York City. Any visitor browsing racks in those stores can receive an instant 10 percent off at the register. The definition of such a visitor—out of the country, state, town, maybe just someone who walked farther than normal from the parking space—rests entirely on the sales assistant’s mood.

Some discounts aren’t codified but casual, and almost always involve cash. One fashionista reported browsing a $5,000 coat at the Calvin Klein store in New York and lowballed an offer of half-price in greenbacks. He walked out minutes later with the coat, having carved out his own 50 percent discount. Another wrangled a spontaneous deal at Prada in Venice, Italy. Drawn to a pair of classic loafers, he hemmed and hawed over the impulse purchase. “I asked the sales assistant if there was a cash discount. I mean, I was joking,” he recalls. He was stunned when the girl nodded instantly. “She said, ‘Oh yes, I could do 20 percent.’ ”

Whether clienteling with a chance for pre-shopping, mailing a discount card to cherry-picked VIPs. or letting cashed-up customers name their own price, it’s a stunning shift in the way upscale goods are marked down. Both furtive and lucrative, these deals mean that two shoppers simultaneously browsing the racks in a luxury boutique or a department store might pay dramatically different prices for the exact same item. It’s changing luxury’s value, in all its senses. Luxury has been the highest-profile victim of oversupply. In no other sector is the buyer in a more powerful position. Wait long enough, search hard enough, dig deep enough, and the price of every treat will be cut in half, as every shopper now knows.

Excerpted from Bargain Fever: How to Shop in a Discounted World by Mark Ellwood, out now from Portfolio.