Dynamic Pricing of Luxury Fashion Products

- An Empirical Analysis of Online Stores -

Abstract

To reveal the actual situation of luxury fashion products in the online market, this study sheds light on dynamic pricing observed from the difference between regular and selling prices. Regular price distributions indicated the prestige of luxury fashion brands, with traditional French and Italian brands appearing in a higher rank. Two emerging luxury brands also had a higher social status. This result suggests that the mobility of creative talents allows emerging brands to inherit the brand equity of traditional and prestigious brands. This paper also analyzed dynamic pricing strategy in luxury fashion products by category. The results revealed 67.4% of dresses were discounted with the large markdown ratio even for online luxury fashion stores, however, 69.1% of bags were sold at regular price. A time fluctuation model of product value to interpret the dynamic pricing difference between dresses and bags are also discussed.