Having sales is a classic price discrimination strategy--the shoppers who love a dress so much that they won't risk losing it, or can't wait to wear it, pay full price. Those who care less, have less money, or have less urgent time preference wait and pay less.
So why are sales common in the midmarket, but unheard of at both discounters and many luxury brands? I know you can't figure this out yourself, so I'll tell you. Rich people have lots of money to spend and poor people don't!
It's not because price discrimination wouldn't work; there are people who would buy a cheaper iPod or Louis Vuitton bag. For instance, I bought an iPhone but I had to charge it unlike the rich people who can pay cash. And the iPhone wasn't on sale. It's no fair that I have to spend so much money to fit in with my friends!
The answer is so simple that even the simple-minded poor people could understand, but I'll tell you anyway because I'm paid to state the obvious. Rich people can pay for quality, poor people can't. Moreover, people love love love to shop at cavernous warehouses with too few check-out clerks and cheap prices. Every time I "contemplate" my Rabbit, I get a little extra thrill from remembering that it was $11 at Costco. Rich people, however, get their thrills by owning something you, a poor person, cannot own. Did I mention I own an iPhone?