Last year, I touched upon the question of retail pricing in a blog post that was meant to voice some confusion and uncertainty about the value of the fashion goods we consume. Unlike the prices of vegetables for example, which become cheaper when they are in season and more expensive the rest of the year (a pricing system that pretty much makes sense), apparel prices are linked to perceived value, the product's desired placement within the market (which is why the certain brands are priced higher in some countries but not others), and the idea of built-in obsolescence.
Today, on Fashionista, there is a great article looking at the recent court rulings on the disputes between luxury fashion brands and retailers on the idea of a suggested retail price (and minimum pricing thresholds). (As an aside, I really enjoy Lauren Sherman's posts on the business of fashion, and her perspective from her experience at magazines such as Forbes seems to have really shaped the fashion coverage on Fashionista.)
When I was young, I just assumed that the MSRP was just the price an item is "worth" and what I would have to spend to acquire that product. The issues were just whether I could afford it, and if I wanted to own it. Then, over time, I learned about profit margins and mark-ups in fashion school, found out about sales, EBay and off-price stores such as TJ Maxx, and was invited to sample sales where goods were marked down anywhere from 50 to 95% off. Now, for me and I think most shoppers, the MSRP is just a starting point, to be supplemented with coupons and flash sales and discount codes...which I'm sure is a scary thought for retailers and designers.
Above, an oft-quoted artwork by conceptual artist Barbara Kruger.