Retailers in 'Real Trouble' With Discounts: Ellwood

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Dec. 30 (Bloomberg) -- "Bargain Fever" Author Mark Ellwood discusses post-holiday retail shopping on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Are they going to make is go in the stores and buy things?

I think the retailers are all the bid desperate.

We are seeing 75% off as a price of buy-in and for the first time.

Is it going to pay off for us?

Yes, we will get cheaper prices than never.

I think that retailers will start having real trouble because they are teaching us to expect huge discounts.

Of course, there is the margin squeeze.

How cheaply can you sell goods?

The trade-off here is 75% off is going to get me in the store and then i will buy seven extra things that i did not intend to buy.

That is essentially what walmart is, right?

It is a vicious circle.

We have shows like orders, storage wars, the shows are just about stuff.

We should not be trying to buy more, we should be buying right.

Too much stuff for us to buy.

That is the lower end when i think about discounts.

Jcpenney, walmart, target.

What about the others?

I know you are a luxury expert as well.

They do not discount at all.

Seems like a higher the velvet rope, the better.

This is fascinating, a lot of luxury brands need to cross their fingers.

All -- other than louis vuitton, there are always deals to be had.

Because there are not necessarily deals on everything, but do they have a sample sale?

Absolutely.

They do discount, they just are extremely quiet about it.

We were talking about that, over the weekend a friend of mine was saying that chanel is trying to make their bags harder to get because they feel like they have been scooped.

As you said as well, there is actually no waiting list.

People think there is, but there is not.

There is an amazing book called bringing home the birkin about a man who was a birkin dealer.

If you spend enough on scarves and knickknacks, they will magically open the door to the basement.

The idea of a waiting list is a misnomer.

Chanel is hiking prices.

Those quilted handbags are identical but are twice the price from five years ago.

Like there is that appeal to snobbery.

It is not expensive enough, people do not feel that it is enough of a treat or a reward and suddenly the mentality changes.

Absolutely.

The more that it is a status symbol, guilt by association, you feel better by spending more, retail shangri-la for them.

We have been talking a lot about this idea of the sharing economy.

How does this change the way that retailers operate?

If you want a chanel bag, you want it and you do not care, but there are websites that let you borrow or buy secondhand.

Is that going to change how business runs?

The big issue with some of the consignment buying is there is such an issue around fraud, the issue around super fakes, the fakes made in the factory in china and have slipped out the back or, they are the real thing, just not legally.

Once you start having problems with authenticity, that is the real issue.

You see that as a much bigger challenge or game changer for the retail industry, for the luxury retail industry than the so-called sharing?

Absolutely, faking is a looming problem.

As the industry expands there are bigger and bigger it -- bigger and bigger incentives to create fakes.

Fines are so minimal, you get a slap on the wrist and you pay the money.

Marcus, thank you for joining me.

Mark ellwood, joining me there.

Moving and shaking this hour, the netflix ceo, reed hastings, the streaming subscription service will be purging thousands of titles from its database beginning this saturday, the goal is to make room for new content.

It was announced by reddit sleuths on saturday.

This text has been automatically generated. It may not be 100% accurate.

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