What Effect do Competitors’ Prices Have on Demand in Fashion E-Commerce?

We empirically estimate price elasticities in the online fashion retailing industry and quantify individual components stemming from both the own-price as well as competitive effects. In contrast to extant literature, we examine an environment that is not as dependent on price comparison sites. We use a novel data set provided by a leading European e-commerce company and supplement it with competitors’ prices for regression analysis. We find an unexpectedly small influence of the price ranking relative to competition accounting for about 32% of the overall price elasticity. Furthermore, we discuss implications for academics and practitioners.