2023-10-16 23:56:17
Dynamic prices are becoming fashionable. Changing prices in real time based on supply and demand is a strategy that other sectors, especially transportation or food, have followed in recent years. However, the trend is establishing itself in the fashion sector thanks to some operators such as Telfar, which has used this strategy as a marketing tool.
Prices are one of the most important competitive factors for the sector and Its rise depends largely on circumstances such as consumer spending or supply chain volatility. Until now, fashion has been characterized by a fixed pricing model, with cosmetics being the only sector with the largest price variations for the same product due to its large multi-brand market.
A few months ago, the American fashion distribution company Telfar joined the wave of dynamic prices and launched a new concept of pricing, in which the amount of the product varied constantly, depending on the number of people who noticed him. From a minimum that the company established, the price increased minimally as consumers bought it, until supplies were exhausted.
Dynamic pricing has been a strategy implemented mostly by the transportation or food sector
With this strategy, the company was able to find out which of its products were most popular and justified that the more demand a piece has, the orders to factories can be higher, which means the possibility of negotiating a cheaper production price, which then translates into lower prices.
The application of dynamic prices means for the sector collect valuable data on customer purchase intention, which then determine the trend in the market. However, the application of dynamic pricing in fashion varies depending on the product: in trend collections it is easier to apply, while more basic products They are not strategic, according to a report by the consulting firm McKinsey.
The application of dynamic prices is thus consolidated as a particularly useful source of data for fashion companies that distribute on demand. As well as for multi-brand companies that make periodic inventory purchases.
In recent years, online distribution giants like Amazon have also echoed this trend, changing the prices of their items every few minutes. However, The same consulting firm warns that small and medium-sized companies can also join this trendas long as it is implemented with good monitoring and useful consumer data is collected.
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