But don’t count Saks Fifth Avenue among retailers offering deep discounts. In an effort to wean customers from sales, the department store is stocking fewer items and selling them at full price.

Why exactly is Saks jumping off the sale bandwagon?

Because exclusivity is the driving force behind luxury purchases.

Thorstein Veblen coined the term conspicuous consumption in his 1899 book, The Theory of the Leisure Class, which explains that individuals display their wealth by spending lavishly on goods and services:

• First class trips to Paris.
• A vacation home in the Hamptons.
• Prada mink handbags.

Every brand occupies a position in the customer’s mind. For Saks Fifth Avenue, this position is luxury and the exclusivity it buys. Kudos to Saks for understanding that a brand cannot stand for luxury while offering deep discounts of 50-70 percent.

So, what position does your brand occupy in the customer’s mind? And are you taking steps to protect its position?