Dynamic Pricing in the Apparel World

Dynamic pricing, often called real-time pricing or price optimization, is a flexible pricing system that's revolutionizing the online retail industry. Long used in the travel sector, it's becoming more common in a range of online retail fields. Take a closer look at how it works in the apparel industry and the benefits dynamic pricing can bring to your business.

How Does Dynamic Pricing Work?

apparel dynamic pricing

Rather than ascribing a fixed price to goods, dynamic pricing lets companies sell their goods at prices that rise and fall depending on various factors. These factors may include the customer's location, the time of day or week, the price competitors charge for similar garments, and consumer demand. Algorithms built into shopping websites consider all these factors to determine the optimum pricing for each consumer.

Dynamic Pricing Algorithms Reduce Workload Within Your Organization

In the world of fast fashion , where labels such as like H&M and Zara have staked their reputations on delivering quality, on-trend pieces at low costs, price matters. Without dynamic pricing, apparel firms must dedicate time to assess their competitors' prices and lower them to get a market advantage. With dynamic pricing, algorithms working behind the scenes do all this work. Pricing intelligence software can scan thousands of apparel pieces from leading fashion houses many times every hour, easing the burden for apparel labels who can then turn their attention to other tasks, such as designing and marketing.

Dynamic Pricing Boosts Profits

Apparel firms must always consider their bottom lines. Evidence shows implementing dynamic pricing strategies is an effective way to boost profits.

According to Forrester Research figures cited by DMN, price intelligence software typically increases gross margins by 10 percent. However, it can be much more lucrative. Digital marketing source Econsultancy reported that Amazon, a dynamic pricing leader that changes its prices roughly every 10 minutes, saw its sales increase by more than 27 percent from 2012 to 2013 thanks largely to dynamic pricing. Walmart also boosted its online sales through dynamic pricing. In 2013, dynamic pricing helped its international online sales grew by 30 percent, topping Amazon's growth for the first time in five years.

Dynamic Pricing Offers Real-time Information About the Market

Up-to-date information about market forces helps businesses make more informed decisions about their practices and predict what might lie ahead. Dynamic pricing gives businesses, including apparel firms, more usable information they can use to improve.

Price intelligence software reveals the shape of the market by showing when prices rise and fall. After learning demand for dresses is falling, for example, an apparel company could plan a marketing campaign celebrating these feminine apparel items to reverse the trend. This campaign could get more women thinking about adding dresses to their wardrobe and help raise demand.

Fixed pricing is a traditional option but not the only one available to modern apparel firms selling their garments online. If you're interested in implementing dynamic pricing solutions, request a free consultation from The Apparel Logistics Group. Our IT support services can help you reap the benefits of dynamic pricing sooner.

Posted: 3/22/2017 2:46:32 PM by Global Administrator | with 0 comments

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