IS BRAND LOYA LTY INFLUENCED BY PRICING STRATEGIES IN THE FASTFASHION INDUSTRY?

Abstract

As the fast-fashion industry is estimated to be worth more than 120 billion in 2024, pricing strategies play a vital role in fostering consumer interest in the sector, where brands such as Zara, H&M, and Shein compete fiercely. The research question this investigation will explore is: Is brand loyalty influenced by pricing strategies in the fast-fashion industry? It seeks to validate the hypothesis that dynamic pricing, including flash sales based on AI and personalized discounts, increases brand loyalty by 25 points relative to fixed pricing, which is assessed through the prism of repurchase intent and net promoter scores. An online survey of 250 consumers aged 18-35 in China and the UK was conducted to gather primary data. In both simulated dynamic and fixed pricing conditions, respondents rated loyalty using a 5-point Likert scale. A binary logistic regression was adopted in this study, where loyalty (1 = loyal, score 4 or higher) was the dependent variable, dynamic pricing exposure was the central independent variable, and demographics, income, and brand familiarity were considered as controls. Model diagnostics were used to indicate goodness-of-fit (Nagelkerke R 2 = 0.28). The key findings suggest that as it was hypothesized, dynamic pricing can raise the likelihood of loyalty by 24.8 percent ( 0.223, OR = 1.25, p < 0.05), yet the results were more pronounced among price-sensitive low-income clients (OR = 1.32, p < 0.01). This also applies to the fast-fashion industry of more than $ 120 billion, which is focused on price to initiate consumer interactions amidst the high competition with other brands, such as Zara, H&M, or Shein. The research contributes to the body of knowledge about the topic of pricing-loyalty association, and poses the question of the ethical strategies towards the turbulent markets.