Explain the concept of anchoring in the context of pricing strategies in the fashion industry.

Explain the concept of anchoring in the context of pricing strategies in the fashion industry.

Anchoring in the context of pricing strategies in the fashion industry refers to the practice of setting a high initial price for a product or service to create a perception of value and quality. This initial price serves as an anchor point for consumers, influencing their perception of what is a reasonable price for the product. By anchoring the price higher, fashion companies can then offer discounts or promotions that appear more attractive to consumers, leading to increased sales and perceived value.