With the American retail sector experiencing its biggest plunge of 0.3% in 16 months on Wednesday, things don't seem to be looking as positive for in-store sales after all as economists had initially predicted.

A key (and perhaps the most important) reason for the decline of the retail sector is the emergence of e-commerce and online markets. Things were looking bad enough for stores anyway as they struggled to effectively compete with brands like Amazon, which are able to eliminate intermediary costs and sell directly to consumers- and now, it seems as though online retailers have another trick up their sleeve.

To manufacture its Kennedy Weekender overnight bag, the accessories and leather goods company Oliver Cabell spends $16.02 on canvas, $11.58 on leather, $5.68 on lining and 78 cents on webbing. The zipper costs the manufacturer $4.27. In total - including manufacturing, transit, duties and other expenses - the company spends $110.35 to create the bag, which it sells online for $285.

How would one know this? The answer lies in a new pricing phenomenon that has gripped a slew of digital and online retailers alike: transparency pricing.

Most retailers wouldn't dare to display the breakdown of the cost of their products in such an accessible and detailed fashion- not only would it reveal how big of a markup they are charging, which would deter some customers, but it would also endow their competitors with an unfair advantage. Yet, transparent pricing has been garnering attention among a select group of retailers, who claim that it appeals particularly to millennials - who often want to know the origin of the goods they are buying as well as if they are getting bang for their buck.

"Price transparency is crucial for clients who want to be sure that everyone was paid a fair wage along the way," said Bruno Pieters, founder of Honest By, a clothing and accessories retailer based in Belgium. Employing the slogan "the world's first 100 percent transparent company," it uses a price breakdown so extensive it includes the cost of size labels and hang tags.

Scott Gabrielson of Oliver Cabell, said the ability to sell directly to consumers online influenced his decision to use transparency pricing to a major extent. He wanted to prove that, by eliminating brick-and-mortar and other built-in costs, clothing sellers could offer lower prices for consumers.

One could argue that the transparent pricing model could also be applied to physical retail: it could, but not with the same efficiency and success that it would serve its purpose with online. For instance, many big-box retailers manufacture and sell in bulk, and it is therefore difficult for middlemen and ultimately stores to obtain specifics about costs. These big brands also outsource a lot of their manufacturing to countries with cheap labor like Indonesia or India, and thus have extremely high markups that could potentially dissuade consumers from buying their products, especially because their consumer base does not only consist of millennials. Finally, a website gives one the option to scroll over certain products to see costs pop up which is simpler and clearer.

If the retail industry is to revitalize itself, it needs to continue to improve its own customer service; through more 'transparent' methods.