Does Demand-Driven Pricing Work? Fashion Brand Telfar Is Giving It A Try

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

During its latest clothing drop on March 27, the brand began testing a dynamic pricing model, letting customers determine how much they wanted to pay.

Here's how it worked:

• When pieces from the collection dropped, they were listed at wholesale prices (around 50% less than retail).
• Prices raised incrementally each second, capping at the full retail listing.
• The price pieces sold out at then became the final price.

In other words, the more popular an item was, the lower the price was for everyone.

This style of pricing could be a win-win for the brand and customers. The brand now knows exactly how many units to order from manufacturers and won’t have to rely on steep price cuts to move product, and customers are able to get designer pieces that fit into their budgets. With this model, Telfar can immediately gauge which items its customers like most and gain valuable insights that will help influence future designs 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 for entry. I never wanted that for my brand.”

Telfar will continue testing the dynamic pricing model on its clothing drops through April 24. By allowing consumers to choose their own pricing, Telfar is emphasizing its commitment to accessibility in real time.

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