An investigation of competitive pricing among apparel retailers and brands

Abstract

PurposeThe aim of this paper is to investigate competitive pricing strategies of apparel brands and retailers.Design/methodology/approachThe paper begins with a broad discussion of competition by examining Porter's five forces model, and narrows by examining price competition within price tiers in the retail apparel industry according to store format and brands. Included are case studies of apparel retailers and brands incorporating concepts of pricing strategies, brand positioning, and price competition, with a focus on retail channel relationships. The paper analyzes the impact of price competition on apparel retailers and brands, and further examines price tiers as a competitive strategy.FindingsThe study reveals that the concept of price tiers is applicable to apparel retailers and brands. Price tiering is a vehicle for market positioning for the retail apparel industry. Retailers are enacting a price tier strategy by branding their retail store formats or engaging store brands as a vehicle of differentiation for a tier. Retailers and brands can be successful with a price tier strategy, unless they fail to differentiate between tiers on factors other than on price alone.Research limitations/implicationsThe lack of relevant price competition literature, relating to the retailer apparel industry, forced the exploration of price competition literature from grocery and automotive sectors.Originality/valueThe paper provides useful information on the impact of price competition on apparel retailers and brands, and also price tiers as a competitive strategy.