Behind the beautiful facade 1: The cheapest price wins the contract

Discounts were supposed to attract customers. Instead, they’ve created a market where hardly anyone believes in the regular price anymore.

Luxury at list price – who does that?

The perfume industry has achieved a remarkable feat: it sells products for 180, 250, or 350 euros, talks about precious raw materials, great perfumers, craftsmanship, and exclusivity – and at the same time teaches its customers that it's better not to pay that price. After all, if you have a little patience, you'll soon receive another newsletter voucher, an app discount, a shopping week, a flash sale, or some other reason why everything has to be a little cheaper today of all days.

In the past, a discount was an event. Today, the regular price is almost an event. Black Friday became Black Week, the summer sale became the Summer Sale, and in between, there are enough promotions to fill an entire calendar. It's undisputed that retailers generate short-term revenue this way. The more interesting question is what remains in the customer's mind after years of this constant bombardment.

The answer is unpleasant: Distrust of the actual price.

Customers have long understood: waiting pays off

Anyone who has bought a fragrance for 220 euros and seen it two weeks later for 169 euros usually only experiences this once. For their next purchase, they wait. Not because they have suddenly become stingy, but because the industry has educated them excellently.

Customers learn quickly. 220 euros are apparently not really 220 euros. Maybe it's 199 euros on the weekend, 179 euros during a shopping week, and a little less with an additional voucher. At some point, the marked RRP loses its character as an actual selling price and becomes a decorative calculation figure from which the customer mentally deducts twenty percent at first glance.

This fundamentally changes purchasing behavior. Previously, a retailer had to explain why a fragrance was worth its price. Today, they increasingly have to explain why they are not offering a discount on it. For a market that considers itself luxury, this is a remarkable development.

When the RRP becomes a fantasy figure, the brand has a problem

Luxury only works if a price is credible. A customer doesn't need to understand how many euros the liquid in the bottle actually costs. But they must be able to believe that the product, brand, distribution, design, and desirability together justify a certain value.

Precisely this credibility is destroyed by constant discounting. If a perfume with an RRP of 250 euros regularly appears for 190 euros, the crucial question eventually is no longer why someone is asking 190 euros. The question is: Why did the brand originally want 250?

A one-time sale does little damage. A systematic price difference, however, changes perception. The lower price becomes the customer's internal reference value. If the product later rises back to 250 euros, they perceive it not as a return to the regular price, but as an increase in price.

Thus, an RRP that originally created value becomes a number that no one truly believes in anymore.

The healthy ones suddenly look expensive

This development becomes particularly grotesque for retailers who calculate reasonably. They employ qualified staff, provide testers, hand out samples, invest in advice, and carry brands that don't turn over in three days. All of this must be paid for from the retail margin.

Next to them is a competitor offering the same fragrance 40 or 60 euros cheaper. The customer doesn't see why they do that. Perhaps they have better purchasing conditions. Perhaps they are sitting on too much stock. Perhaps they need liquidity. Perhaps they simply want to generate sales. For the customer, only one comparison remains: 219 euros here, 159 euros there.

This means that precisely the economically sound retailer can suddenly look like the rip-off artist. The one who finances staff, service, and long-term solvency has to justify why they don't give away twenty percent every month.

This is one of the most dangerous effects of price competition: The market doesn't automatically punish those who manage poorly. Sometimes it punishes those who refuse to calculate poorly.

Those desperately in need of money suddenly discover the charm of a full warehouse

This is where cases like Pieper or currently Bodo Thiemann come into play. Not because these companies invented the discount culture, but because economic crises exacerbate a known mechanism: goods tie up money.

A full warehouse may look impressive on paper. But it doesn't pay salaries, rent, or due supplier invoices. Only when the bottle leaves the warehouse does inventory become liquidity. The greater the financial pressure, the more tempting price becomes as a lever.

This explains why insolvency and aggressive pricing actions can be economically compatible. Anyone who needs liquidity has to move goods. Anyone who wants to move goods quickly lowers the price. In the short term, this can be perfectly rational.

In the long term, however, the market pays the price.

Because the customer doesn't know if a fragrance was sold for 129 euros because a retailer needed liquidity. They only remember: 129 euros is apparently possible.

That's where an individual company's problem becomes a problem for everyone else.

The industry complains about the monster – and has fed it itself for years

However, it would be quite convenient to place the blame solely on retail. The industry has played a significant role in creating the current situation. Brands wanted to grow, distributors wanted more sales, field sales wanted more doors, retailers wanted larger assortments. Every additional point of sale initially promised more business.

But distribution has a simple side effect: the more retailers sell the same product, the more interchangeable they become for the customer. If the fragrance is identical, the delivery time similar, and shipping is free anyway, at some point the only easily understandable distinguishing feature remaining is price.

Therefore, the industry cannot strive for the broadest possible distribution for years and then be surprised when retailers engage in price competition among themselves. More doors do not automatically mean more customers. They can also mean that more retailers are fighting for the same customers.

And when there's too much stock somewhere, the percentage signs begin to appear.

Exclusive niche fragrances become mass-market products faster than brands would like

Niche perfume, in particular, thrives on a different idea. It's not supposed to be everywhere. The brand tells a story of independence, special creativity, exceptional raw materials, and carefully selected distribution. Customers often accept prices far above those of classic mainstream perfumes for this.

But exclusivity has an unpleasant characteristic: you can't just claim it. You have to be able to experience it in the market.

A fragrance that appears in more and more shops and is constantly discounted at the same time loses precisely this aura. No matter how artfully designed the bottle, how rare the oud, or how renowned the perfumer – if there's a red "-30%" sign next to it permanently, that sign tells a louder story.

The extraordinary object becomes a comparable commodity. And comparable commodities are bought based on price.

That's where the niche begins to abolish itself.

“No to discount battles” – sounds excellent. But who starts it?

Udo Heuser, CEO and co-shareholder of the NOBILIS GROUP and President of the Fragrance Foundation Germany, clearly addressed the problem in 2026: “NO to discount battles.” He criticized the increasingly long promotional periods and the devaluation of luxury through permanent price reductions.

He hits the nail on the head. However, the practical implementation becomes interesting. The distributor wants to preserve brand value, the retailer wants to generate sales, and legally, the independent retailer has their own pricing autonomy. At the same time, hardly any company voluntarily wants to forgo business while competitors continue to discount.

We know the result: everyone complains about the price war, but hardly anyone wants to be the first to lay down their weapon.

If Retailer A ends their discount, but Retailer B continues to give twenty percent, some customers will switch to B. If a brand reduces its distribution, it may initially forgo sales. If a distributor puts less merchandise into the market, unit numbers will be missing from their own planning.

The long-term rational decision can therefore be economically very unpleasant in the short term. That's precisely why it's so rare.

The cheapest price wins the order – but the industry might lose the customer

A customer who orders because of a thirty percent discount is initially a successful sale. Whether this develops into a valuable customer relationship is another question. Those who came solely for the price often disappear just as quickly when another retailer is five euros cheaper next time.

This creates no loyalty, but rather migration. The customer belongs neither to the perfumery, nor the brand, and certainly not the consultant. They belong to the cheapest offer.

For high-quality specialist retail, this is fatal. Consulting takes time. Employees must know products, understand brands, and be able to assess customers. A good assortment consists not only of the ten bestsellers, but also of fragrances that need to be explained. Precisely these services are financed by the margin, which is increasingly disappearing in price competition.

If margins continue to shrink, savings will first be made on things that are not immediately visible on the cash register display: staff, consulting, testers, samples, unusual brands. The temporarily cheaper fragrance can thus long-term produce a more boring market.

Perhaps luxury needs to learn again to let a customer go

This sounds almost heretical in an industry that has been programmed for growth for decades. But perhaps a retailer sometimes has to say: At this price, I don't want this sale.

Not every sale is a good sale. A package leaving the warehouse is not yet an economic success. A sale with an insufficient contribution margin can even be the opposite. Anyone who constantly needs more units to offset shrinking margins is not building a healthy business, but an increasingly fast hamster wheel.

The same applies to brands. Not every additional point of sale improves a brand. Sometimes it destroys precisely the desirability that made its price possible in the first place. Less distribution can be more valuable than maximum distribution if it preserves price worthiness and profile.

Perhaps the industry therefore needs to rediscover that scarcity is not automatically a problem and foregoing sales is not automatically a defeat.

The real discount battle is now taking place in the customer's mind

The most difficult part cannot simply be fixed with a new sales strategy. The industry has created an expectation over years, and expectations disappear slowly. Anyone who has shown the customer long enough that twenty percent is practically always possible cannot explain next Monday that the list price is sacred again as of now.

Trust in prices must be rebuilt. This requires consistency from brands, distributors, and retailers – and presumably the willingness to lose revenue in the short term. This is precisely where it will become clear how serious the many public statements against discount battles actually are.

Because the German perfume market doesn't have too few special offers. It may now have too little courage for the normal price.

And perhaps the crucial question is no longer: How cheap can perfume be? Much more unpleasant is the question of how expensive perfume can even be if the industry has spent years telling its customers that the next discount is guaranteed to come.

In the third part of our research, we therefore look behind the price tags. There, retailers meet purchasing associations, distributors meet association officials, and family ties meet business interests. Because if you want to understand why some brands suddenly appear everywhere and how goods, money, and influence flow through this market, you need to know who is actually connected to whom behind the scenes.

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