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Retail Service, Pricing, and Channel Selection Strategies for Fashion Products in a Two-Stage Decision Model

Author

Listed:
  • Liwen Liu

    (School of Politics & Public Administration, Soochow University, Suzhou 215123, China)

  • Xuejuan Li

    (School of Politics & Public Administration, Soochow University, Suzhou 215123, China)

  • Siyu Zhu

    (College of Design and Engineering, National University of Singapore, 21 Lower Kent Ridge Rd, Singapore 119077, Singapore)

  • Mengyao Wang

    (School of Politics & Public Administration, Soochow University, Suzhou 215123, China)

Abstract

Fashion products are typically sold through both online and offline channels during two distinct phases: the launch and markdown period. Pricing strategies present significant challenges for manufacturers, particularly as consumers increasingly adopt strategic purchasing behaviors. Key factors, including product fashion utility, purchase timing, and consumer characteristics, complicate manufacturers’ channel selection, pricing decisions, and service strategy formulation—necessitating deeper investigation. This paper establishes a two-echelon supply chain model featuring a fashion manufacturer and a retailer to determine optimal channel, pricing, and service strategies across both selling periods amid strategic consumer behavior. We examine four channel strategies: (1) the MM strategy: the manufacturer operates both channels (online and offline channels) during both periods (launch and markdown period); (2) the MR strategy: the manufacturer operates both channels during the launch stage, and the retailer sells online during the markdown period; (3) the RR strategy: the manufacturer sells offline, and the retailer operates the online channel during both stages; (4) the RM strategy: the manufacturer sells online during both stages, and the retailer sells through the offline channel. Our analysis yields critical insights: When off-season discounts are limited, the manufacturer should maintain direct control of both channels. However, when the off-season discount is significant, the manufacturer needs to set the channel strategy according to the fashion utility. If the fashion utility is small, direct sales through offline channels during the launch period, while entrusting the retailer to distribute in online channels during both periods, should be adopted. If the fashion utility is large, a dual-channel, two-stage, entirely direct sales strategy should be adopted. This study elucidates the optimal manufacturer channel and pricing strategy options and provides some theoretical contributions and practical implications.

Suggested Citation

  • Liwen Liu & Xuejuan Li & Siyu Zhu & Mengyao Wang, 2025. "Retail Service, Pricing, and Channel Selection Strategies for Fashion Products in a Two-Stage Decision Model," Mathematics, MDPI, vol. 13(16), pages 1-25, August.
    • Handle: RePEc:gam:jmathe:v:13:y:2025:i:16:p:2575-:d:1722776
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    References listed on IDEAS

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    1. Namin, Aidin & Soysal, Gonca P. & Ratchford, Brian T., 2022. "Alleviating demand uncertainty for seasonal goods: An analysis of attribute-based markdown policy for fashion retailers," Journal of Business Research, Elsevier, vol. 145(C), pages 671-681.
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    5. Peng Wang & Jing Shao & Liping Liang & Yu Tang, 2025. "Multi-channel retailing and consumers’ environmental consciousness," Annals of Operations Research, Springer, vol. 345(1), pages 467-515, February.
    6. Lin, Jing & Ma, Xin & Talluri, Srinivas & Yang, Cheng-Hu, 2021. "Retail channel management decisions under collusion," European Journal of Operational Research, Elsevier, vol. 294(2), pages 700-710.
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