The Price Tag Paradox

Unraveling Fashion's Complicated Relationship with Value

In the ever-shifting world of the fashion industry, one constant seems to reign supreme: fluctuating price tags. While the allure of a bargain often seduces shoppers, the true cost of fashion extends far beyond the digits on a price tag.

The mantra of 'cheaper is better' has woven itself into the fabric of modern consumerism, perpetuated by fast fashion giants like Boohoo and PrettyLittleThing, whose opaque pricing models prioritise affordability over accountability.

But what lies beneath the surface of these enticingly low price tags? If 2020’s revelations about Boohoo’s poor worker wages are anything to go by, it’s ethically dubious standards and practices.

With fast fashion racing to the bottom for the cheapest prices, and with luxury designers unabashedly hiking theirs twice a year, what’s the happy medium? And where does this position well-meaning brands that simply want to honestly price their quality, sustainably produced products?

The catch 22

For brands, this poses a catch-22 situation. Consumers are increasingly ethically minded, but this comes with higher prices, and with a cost-of-living crisis, they have less to splurge on clothes. Research from Nosto backs this. 57% of consumers want fashion to be more sustainable. But with living costs rising, 61% will prioritise price over sustainability when shopping for fashion. Meanwhile, 55% agree that sustainable fashion is often too expensive.

At first glance, the allure of a bargain seems irresistible. Yet, the downstream impact of suppressing prices reverberates throughout the fashion supply chain. Behind every bargain-priced bag lies a complex network of human labour, environmental resources, and ethical considerations. While consumers may revel in the immediate gratification of a low-cost purchase, the hidden costs of mass production and exploitation cast a long shadow over the industry.

Doing ‘the right thing’ poses a very real challenge for small fashion businesses that want to experience growth while trying to stay sustainable. After all, they face increased costs, just like the consumer.

One recent paper identified three dominant challenges:

1. Difficulty justifying the higher prices and explain the added benefits of sustainable products to consumers.
2. Resource constraints that create operational friction and overwhelm decision-makers.
3. Sustainable sourcing and production processes in an industry still driven by mass production and low-cost strategies.

The quest for meaningful value

In the quest for value, it's essential to redefine our understanding of price. A low price tag doesn't necessarily equate to value; rather, it often serves as a smokescreen, concealing the true cost of production.

Consider, for instance, the disparity between two black leather handbags of seemingly similar quality. One, a designer bag, commands thousands, while the other languishes on the clearance rack for a fraction of the price.

The disparity lies not in the intrinsic value of the bags themselves but rather in the perception cultivated by branding, marketing, and societal constructs of prestige.

Shining a light on the hyper-elevated prices of designer handbags is YouTuber and leather craftsman, Tanner Leatherstein. His excellent channel shows him carefully deconstructing designer bags from big hitters like Louis Vuitton and Hermes to smaller independents such as Aesther Ekme and LATICO.

Then, he breaks down the material and labour costs before reporting honestly on their actual value. You, the viewer, are then invited to decide whether the bag is worth its price tag.

The psychology of sky-high pricing

In a world where status symbols reign supreme, the psychology of pricing in fashion becomes a potent force. Brands wield price as a tool of perception, crafting an illusion of exclusivity or accessibility to cater to diverse consumer demographics. Yet, beneath the veneer of luxury or affordability lies the intrinsic value of craftsmanship, ethical sourcing, and sustainability.

As the winds of change sweep through the fashion landscape, now more than ever is the time to confront the misplaced psychology of pricing. Fortunately, today's consumers are increasingly attuned to the ethical implications of their purchasing decisions, demanding transparency, accountability and sustainability from the brands they support.

On one hand, you have authentic, independent small brands worried about passing on wholesale costs to the consumer; on the other, you have brazen luxury megabrands like Hermes that announce an 8% price-hike at a time when their annual sales top $14 billion. Chanel, too, has been vastly criticised for its audacious price increases (while quality goes down); up 8% in 2024. Indeed, Chanel bags have more than doubled in price from $4,900 to $10,800 for a Medium Chanel Classic Flap Bag since 2016.

A way forward

For small businesses navigating the turbulent waters of wholesale price fluctuations, the imperative lies in forging genuine connections with consumers based on shared values of quality, integrity, and social responsibility. While the temptation to undercut prices or elevate them further may offer short-term gains, the true measure of success lies in cultivating a brand identity rooted in authenticity and value.

So how can brands and labels do this? The answer lies in a multifaceted approach that embraces transparency, innovation, and community engagement.

Firstly, brands can prioritise transparency in their pricing structures and supply chains. By openly communicating the true cost of production, including labour wages, material sourcing, and environmental impact, brands can build trust with consumers who value ethical practices.

Secondly, innovation is key to navigating the challenges of pricing in the fashion industry. This includes exploring alternative materials and production methods that reduce costs without compromising quality or sustainability. Embracing technology and digital platforms can also streamline operations and reach new markets more efficiently.

Furthermore, community engagement plays a crucial role in fostering brand loyalty and advocacy. By actively listening to their customers' concerns and values, brands can tailor their messaging and offerings to resonate with their target audience. Collaborating with like-minded organisations and influencers can also amplify their impact and reach.

Ultimately, the path forward for small businesses in the fashion industry lies in embracing a holistic approach that balances economic viability with ethical responsibility. By redefining the notion of value beyond mere price tags, brands can create meaningful connections with consumers and pave the way for a more sustainable and equitable future.

Shop ROWDY’s sustainable, handmade leather handbags, leather travel pouches, crafted from high-welfare, sustainable aniline and nubuck leather sourced from our specialist tannery in Namibia.