Pricing in online fashion retailing: implications for research and practice

Abstract

Drawing on 55 interviews with executives across five online fashion retailers, this paper explores the challenges of price setting and management. We develop a descriptive model of ‘locked-in’ pricing practice to explain organisational routines focused on cost-plus pricing, alignment with competitor prices and historical pricing. Drivers include the complex and uncertain outcomes of pricing, and lack of investment in leading-edge pricing methodologies, together with inadequate training and pricing ownership. Outcomes comprise an aversion to price risk-taking, sees decisions guided by heuristics and a lack of openness to alternative pricing methods. We offer implications for pricing practice to overcome these locked-in behaviours and suggest that research addresses challenges encountered in the implementation of new pricing techniques in organisational settings to narrow the gap between theory and practice.