Retailers, especially luxury retailers are having to change how they do business. It’s no longer unusual to see massive reductions on high end fashion labels like Christian Dior and Christian Lacroix, and Neiman Marcus which has always been rather restrictive with its sales, has cut the prices for brands such as Marc Jacobs, Prada, Manolo Blahnik and Jean Paul Gaultier to half price. Nordstrom started its much awaited semi annual sale earlier this year.

Retailers are also tying up in interesting combinations, with Vera Wang signing a deal with Kohl’s, Ralph Lauren designing a line for J.C. Penney and Normal Kamali teaming up with Wal-Mart. According to Sara Albrecht, the owner of Ultimo a designer boutique on Chicago’s Oak Street, “Before, you would never think of luxury markets being promotional or on sale.” The luxury market has been growing at 10% for the past several years but has now slowed down quite dramatically.

“Price has never been as important to the consumer’s shopping level as it is today no matter what the income level,” said Matt Katz, a New York-based managing director of AlixPartners, a consulting and financial advisory firm. “We’ve studied 5,000 consumers annually for the last 15 years, and for the first time in the history of our study, price is the most important driver for a purchase decision.”