The Evolving Role of CMOs in Pricing Strategies: Insights from the Fashion and Beauty Industries

In an era where consumer behavior is rapidly changing, the role of Chief Marketing Officers (CMOs) is becoming increasingly pivotal, particularly in the realm of pricing strategies. A recent report titled The CMO Brief: What’s Driving Results in Fashion and Beauty Marketing, produced in collaboration with Ekimetrics, underscores the necessity for CMOs to engage actively in pricing decisions. This involvement is not merely a matter of financial acumen; it is about safeguarding brand integrity and aligning with consumer expectations.

The Consumer’s Price Sensitivity

According to McKinsey’s State of the Consumer 2025 report, over 70% of consumers identify price as a significant factor in their perception of value. However, a striking 60% of consumers associate sudden or excessive price hikes with opportunism, which poses a reputational risk for brands. This duality highlights the delicate balance that brands must maintain between profitability and consumer trust.

Pricing strategies in the fashion and beauty sectors require a nuanced approach that transcends traditional financial modeling. It necessitates a comprehensive understanding of how pricing impacts brand perception, informed by diverse data points ranging from competitive benchmarks to customer sentiment. This is where the CMO’s role becomes crucial, as they are uniquely positioned to communicate value effectively across various channels.

The Importance of Data Sharing

One of the primary challenges in aligning teams around pricing decisions is the lack of transparency within and across operational systems. A 2024 Salesforce report reveals that only 31% of marketers are fully satisfied with their ability to unify customer data sources. This fragmentation leads to data silos that hinder holistic pricing strategies.

Effective pricing decisions are critical, as they can significantly influence brand perception and customer loyalty. The report emphasizes that price and promotion can account for a substantial portion of a brand’s incremental impact. Therefore, aligning teams around these decisions is essential to avoid missteps that could alienate customers.

CMOs as Advocates for the Consumer

While CMOs may not directly control pricing strategies, they have a vital role in advocating for consumer interests during pricing discussions. The retail intelligence firm IHL Group estimates that retailers globally lost approximately $1.77 trillion in revenue in 2023 due to inventory imbalances, indicating that existing pricing tools and metrics may not be effectively capturing consumer acceptance.

Holden Bale, global chief strategy officer at Merkle, emphasizes that CMOs should act as the voice of the customer, integrating consumer feedback into pricing strategies. In a landscape where transparency is increasingly demanded by consumers, brands that openly communicate their pricing rationale can turn potential backlash into an opportunity for engagement. For instance, E.l.f. Beauty recently addressed impending price hikes on social media, candidly explaining the impact of inflation and tariffs.

Understanding Price Elasticity

As inflationary pressures mount, price increases may seem inevitable. However, not all products respond uniformly to pricing changes. Price elasticity-the degree to which demand fluctuates in response to price changes-is a critical consideration in the fashion and beauty sectors. Consumers are particularly sensitive to value and perception, making it essential for brands to understand how different products and customer segments react to pricing adjustments.

Entry-level items, such as basics or bestsellers, often serve as anchors for price perception and exhibit high elasticity. Even minor price increases can lead to significant drops in demand for these products. Therefore, brands must protect these items to maintain accessibility and customer traffic.

Sona Abaryan, a partner at Ekimetrics, notes that a granular approach to pricing can help brands tailor their strategies to the elasticity of individual items or categories. This ensures that price adjustments are both effective and sustainable.

Elevating Brand Value

The State of Fashion 2025 report highlights insights from Ralph Lauren’s CEO, Patrice Louvet, who asserts that brand elevation occurs through storytelling, product quality, and the overall shopping experience. This elevation allows brands to justify pricing strategies beyond mere cost considerations.

A June 2025 report from the Deloitte Consumer Industry Center indicates that between 10% and 40% of value perceptions stem from factors other than price. For marketing leaders, understanding which products generate buzz can inform discount strategies, a crucial aspect of brand perception and elevation.

However, without robust internal decision-making frameworks, brands risk prioritizing short-term gains over long-term brand equity. This is where marketing leaders must step in, leveraging customer-centric data to inform pricing decisions while avoiding alienation of their consumer base.

Conclusion

The evolving landscape of consumer expectations necessitates a reevaluation of the CMO’s role in pricing strategies within the fashion and beauty industries. As guardians of brand integrity and advocates for consumer interests, CMOs must engage actively in pricing discussions, leveraging data and insights to inform decisions. By understanding price elasticity and prioritizing brand elevation, they can navigate the complexities of pricing in a way that fosters consumer trust and loyalty. As the market continues to shift, the involvement of CMOs in pricing strategies will be crucial for brands aiming to thrive in an increasingly competitive environment.