The fashion market is one of the most profitable markets in the world. If you think about the success stories of e-commerce providers like Net-a-Porter – an online luxury clothing company from Great Britain – you quickly realize that this segment has slowly but surely moved online. With millions of fashion accessories and clothing items, it is the easiest and fastest way to shop on the internet, for young and old alike. However, the markets in this industry are subject to external changes such as the seasons. For example, there can be short production cycles at certain times of the year. These factors in turn affect prices.
A dynamic sector needs a dynamic pricing strategy
In the fashion sector, it is more important than in any other e-commerce to keep an eye on competitors' prices. And these are difficult to monitor due to constantly changing product portfolios. In addition, new players enter the market every day, fueling competition and price wars. Dynamic pricing can not only withstand these developments in the e-commerce fashion world, but also improves the internal processes of online providers. In this article, we reveal why a dynamic pricing strategy will change the fashion sector forever in a sustainable way.
Fashion retail vs. e-commerce
Fashion brands have lost power in recent years to set the prices for their products outside of their own stores. Instead, retailers now determine the price based on market trends and developments. Zalando, for example, uses price as one of its most important pillars for exponential growth. The online fashion company avoids the traditional sales pricing strategy and constantly adjusts prices dynamically.
Large fashion retailers therefore have an advantage if they act quickly enough when introducing dynamic pricing. And for fashion retailers who offer their products in a physical store, it is a great way to create a unique omnichannel experience for their customers.
Dynamic pricing for fashion & fashion accessories
How complex the introduction of a dynamic pricing strategy is also depends heavily on which fashion items are offered by an online company. The big data from Netrivals shows that younger population groups in particular rely on seasonal shopping for clothing items. It is assumed that a piece of clothing lasts one to three years. As a result, clothing items from past seasons quickly go out of fashion. Such behavior does not occur as frequently with accessories such as watches, sunglasses, or scarves.
A precise analysis of the fashion accessories sector even reveals that eyewear and watches are the markets with the greatest growth potential in the fashion industry. In addition to price, which serves as an orientation factor for customers, the brand is a decisive factor in the purchasing decision. Top brands such as Ray-Ban, Michael Kors, Gucci, Seiko, and Fossil emerge as industry leaders in the analysis.
Online providers operating in the fashion sector must therefore constantly keep an eye on the trends and developments of the online fashion world as well as monitor competitors' prices in order to sell their fashion items at the best price and build a loyal customer base. In this context, Netrivals offers brands and e-commerce companies a complete analysis of the fashion accessories sector to gain a more precise insight into the market and to develop an individual dynamic pricing strategy based on this data using a repricing tool.
