Does demand-driven pricing work? Fashion brand Telfar is trying it out

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This week, fashion brand Telfar took its reputation for value accessibility to the next level.

During its latest clothing drop on March 27, the brand began testing dynamic pricing modelLetting customers determine how much they want to pay.

Here’s how it worked:

  • When pieces fell from the collection, they were listed at wholesale prices (about 50% less than retail).
  • Prices per se increased, capping at full retail listings.
  • The value pieces sold at that time became the final value.

In other words, the more popular an item was, the less it cost everyone.

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This style of pricing can be beneficial to the brand and the customers. Brands now know exactly how many units to order from manufacturers and don’t have to rely on drastic price cuts to move product, and customers are able to get designer pieces that fit their budget. With this model, Telfar can quickly discover which items its customers like best and gain valuable insights that will help influence future design and prices.

Affordability has been a part of Telfar’s ethos since the brand launched in 2005. Founder Telfar Clemons told fast company, “Many brands use price as a barrier to entry. I never wanted this to happen for my brand.

Telfar will continue to test the dynamic pricing model on its clothing drops until April 24. By allowing consumers to set their own pricing, Telfar is emphasizing its commitment to real-time access.

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