Abstract:

The sales mode and dynamic pricing mode leading fashion with stars， models and online celebrities have increasingly become the marketing strategy of fashion products. How to give full play to the spillover effect of network momentum for fashion degree， to formulate a reasonable pricing and promotion strategy， to improve the profits of fashion products and to reduce inventory and losses， has become an important problem to be solved in fashion e-commerce sales. In practice， consumers have different sensitivities to the fashion degree of products. To maximize sales revenue， at the beginning of the product launch， the e-commerce usually builds up network momentum to enhance consumers' awareness of fashion and conform to highly sensitive consumers with higher prices； when the product enters the mature period， there are many homogeneous products in the market， and the fashion degree of the product is declining， and hence， the e-commerce adopts low price promotion to eliminate inventory and cater to low sensitive consumers for fashion degree.The existing literature mostly involves the promotion efforts and pricing decisions of general products and fresh agricultural products. Even if the impact of fashion product prices， promotion efforts on consumer demand is considered， the impact of fashion degree and its spillover effect on consumer demand is rarely considered. For fashion products， when e-commerce does not use the network momentum， the initial fashion degree of the product will decrease with the passage of time， which is like the freshness rate of the fresh agricultural products. However， the fashion degree is different from the freshness rate of fresh agricultural products. First， when network momentum/promotion efforts are taken， fashion degree will have spillover effects； Second， even if the fashion degree drops to zero over time， price reduction will still be favored by price-sensitive consumers. Therefore， the market demand for fashion products is more suitable for the additive form of price and fashion rate. In view of the spillover effect of the fashion degree， the decay effect of it in time， and the stimulating effect of price reduction on price-sensitive consumers， the heterogeneity of customer demand on fashion sensitivity and price sensitivity is fully considered in modeling formulation and decision-making. Firstly， the function of the fashion degree is constructed and demonstrated. The fashion degree is regarded as the multiplication of the spillover effect and decay rate， in which spillover effect is considered as a function of network momentum， beyond the original fashion degree， the decay rate is considered as a negative exponential function of time. That is， at the beginning of the product launch， the fashion degree is the highest. When it is close to or even exceeds the sales season， the fashion degree tends to zero. Secondly， a two-stage additive demand function is constructed based on the heterogeneity of consumers on fashion sensitivity and price sensitivity. Especially， for price-sensitive consumption demand， the impact of discount time is considered due to lack of style and size. Thirdly， the maximum profit function is built inclusive of two stages of sales revenue， procurement cost， inventory carrying cost， and network momentum investment cost， and a comparison is made with no network momentum investment. It is found that the network momentum investment will significantly increase the consumption demand of the two customer groups， and the sales price will slightly increase， which makes the sales profit significantly higher than that without momentum measures. Lastly， sensitivity analysis is made for key parameters. It is found that （1） the higher the proportion of fashion-sensitive consumers the lower the network momentum investment， the higher the fashion-oriented pricing， the earlier the discount time， and the lower the price after the discount， resulting in a decrease in the demand for fashion orientation， and an increase in demand for price orientation， and a higher total sales volume and sales profit； （2）With the increase of the time coefficient of the decay rate， the faster the fashion degree declines， the lower the investment in network campaigns， the lower the price of fashion orientation， and the later the discount time， and a slightly lower price for price-oriented consumers， resulting in a slight increase in demand for fashion orientation， a lower demand for price orientation， and a decline in total sales and profits； （3） With the increase of the sensitivity factor of discount time， the lower the investment in network momentum， the earlier the discount time， the lower the demand and price of the two customer groups， which leads to lower profits.

Key words: fast fashion products, fashion degree, spillover effect, network momentum investment, two-stage pricing