Fashion Retailers Shift to Optimized Discounting Strategies to Manage Inflation

In the face of rising inflation and ongoing market challenges, fashion retailers are increasingly turning to strategic discounting to stay competitive and protect margins. Rather than raising original prices significantly, many brands are optimizing their discount strategies to appeal to price-sensitive consumers without compromising profitability.

A new report from 7Learnings, in partnership with Dealovo, offers a deep dive into this shift. The study analyzed pricing data from 966 brands and 1,006 retailers across the years 2023 and 2024, uncovering several key trends shaping the fashion retail landscape.

Inflation Persists-But Discounting Becomes Smarter

The report confirms that average original prices have continued to climb in 2024. However, the pace of these increases has slowed. Interestingly, while original prices are higher, the average discount rates offered by retailers in 2024 are lower than the previous year.

This suggests a smarter approach to markdowns: retailers are leveraging discounts not just to move inventory, but as a calculated strategy to balance rising costs and maintain affordability for customers.

By using discounts strategically, brands can cushion the impact of inflation, protect their price image, and reduce the risk of losing shoppers to lower-priced competitors.

Brand Stores and Marketplaces: Pricing Gap Narrows

Another trend identified in the report is the convergence of pricing between brand-owned webshops and online marketplaces. Historically, marketplaces offered deeper discounts while brand sites maintained premium pricing. This gap is closing, as brands adjust pricing on their own platforms to remain competitive across channels.

AI Enables Smarter Pricing Decisions

The report features a case study from Tamaris, a leading footwear brand, which demonstrates the role of AI in pricing optimization. By adopting a predictive pricing solution, Tamaris reduced its average discount rate by 5 percentage points-increasing profitability while sustaining sales.

"Retailers who embrace data and AI are leading the way in pricing innovation," said Felix Hoffmann, Co-Founder and CEO of 7Learnings. "This report delivers actionable insights for fashion brands to improve their pricing and discounting decisions."

What's Next for Fashion Retailers?

As pricing continues to be a key lever in consumer engagement, the report urges fashion companies to further invest in data-driven strategies and AI-powered tools. This approach will help businesses maintain competitiveness and profitability in the evolving market.

Download the full report:
https://7learnings.com/resources/download-the-state-of-fa...

7Learnings GmbH
Engeldamm 64b, 10179 Berlin
press@7learnings.com

7Learnings provides an AI-powered pricing platform for retailers and brands, pioneering the overarching optimization of pricing and performance marketing. With 7Learnings' machine learning algorithm, retailers and brands can predict the impact of pricing decisions, determine the optimal price for all products, and reduce manual labor by up to 80 percent. The solution has been rigorously tested in numerous A/B experiments and consistently delivers measurable performance improvements and profit increases of more than ten percent.

7Learnings was founded in Berlin in 2019 by Felix Hoffmann, Eiko van Hettinga, and Martin Nowak. Its clients include international companies such as Westwing, Bonprix, Tom Tailor, Tamaris and DK Company.

This release was published on openPR.