"Strong Retail Sales Are Sign of Improving Economy." Fox News. FOX News Network, 01 Mar. 2012. Web. 09 May 2013.
"Holiday Shoppers May See Big Discounts Soon." Latest News. N.p., n.d. Web. 09 May 2013.
Thursday, May 9, 2013
Buy One,Get One Free? Not in the Economy
The Economy effects Fashion
There are several ways that fashion can affect the economy. However, the economy also plays a large role on the effects it can have on fashion and the retail world. When there is a large downfall in the United States economy it takes a toll on the retail industry. Consumers are going to cut back on their carless spending and consumers will start buying only their needs not their wants. An example of when this occurred would be in the years 2007-2008. Retail stores had noticed a 5%-10% drop in their credit sales because of the way the economy was. If the economy is in a bad situation consumers will adjust their spending habits to try and spend less money.
"AccuVal | Insights | Featured Articles | The Retail Ripple Effect of U.S. Consumers." AccuVal | Insights | Featured Articles | The Retail Ripple Effect of U.S. Consumers. N.p., 01 Mar. 2008. Web. 09 May 2013.
Holidays Hundreds
Holidays, it is all about the holidays. Consumers spend their most money on retail items during the holiday season such as Christmas. Consumers need to buy gifts for their family, friends, relatives, significant others, and even pets. With the variety of gift buys the consumers are spending more money than they usually would during any other month. However, consumers spending only accounts for about 70% of the economy in the United States. But during the holiday seasons there is a large economic gain. During the year of 2012 each consumers were spending around $750 dollars during the holidays. Because of this increase in spending during the holidays, the holiday sales increased 4.1% compared to 2011.
"Can Holiday Spending Lift Economic Doom and Gloom?" Industry Market Trends RSS. N.p., n.d. Web. 09 May 2013.
Supply and Demand in Retail
All industries deal with the factors of supply and demand. The retail industry deals with it on a daily basis. Certain circumstances can affect the supply and demand of the industry. Some circumstances would be, substitute goods, items sold, competition of stores, and holiday seasons. Substitute goods are easily make one of the largest impacts on the supply and demand in retail. Companies such as Nike and Under Armor are a prime example. Consumers can buy the same thing from each company, depending on which one they buy is determined by prices and quality. In the economy the law of supply states that, when the price of good goes up then the supply goes up and when the price of the good goes down then the supply goes down. The law of demand states that, when the price of the good goes up then the demand goes down and when the demand goes up the prices go down. It is important for retail stores follow the supply and demand law because stores need to know how much and how frequently they need to have their items stocked.
"Retail Demand Planning | Inventory Management | Supply Chain Management | Retail - Industries - GRA - Australia." Retail Demand Planning | Inventory Management | Supply Chain Management | Retail - Industries - GRA - Australia. N.p., n.d. Web. 09 May 2013.
The Effects of CPI
Fashion isn’t just about the clothes that you wear and how a person appears. There are more economical traits that are below the surface. Consumer price index is used in all parts of the economy and is used when it comes to the retail industry. CPI or consumer price index is a variety of prices that consumers pay on retail items and other goods. The CPI can adjust retail sale prices. The CPI can be a deflator on the quality of a consumer’s dollar. As the prices would increase, then the power of dollars that consumers purchase with declines. The CPI also helps to make economic decisions.
"How Is the Consumer Price Index (CPI) Used?" U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 09 May 2013.
Money in the Making
Often time’s consumers are shocked by the price of a clothing item. For example, let’s say a consumer finds a basic white V-neck shirt that they like; they look at the price and see that the shirt is priced at $40, consumers will often think the shirt is overpriced because it is a basic item. Consumers need to know that the price they are paying is the retail price. It probably only took $10 for the company to make the shirt, then the price was raised to $20 at wholesale, and last it was raised to $40 at the retail price. Apparel items prices are achieved by the materials their made out of, the trims and applications that are on the item, and by the amount of designing and marketing and transporting it took to make the item. Statistics say that good retail stores such as Gap only make about a 10% profit margin on each item sold. The economy is affected by the price of items. If the retail price is too high for consumers to buy the item then there is a good chance that the consumer will wait for the item to go on sale or look for a similar item elsewhere.
"Why Clothes Cost What They Do – Well Spent." Why Clothes Cost What They Do – Well Spent. N.p., n.d. Web. 09 May 2013.
Brand-name's Help Economy
In today’s society it is all about the brand name clothing and other items. Many people would rather be able to say that they are wearing “Nike” versus an athletic brand from Wal-Mart. But little do people know, it’s not the actual product that you are paying for, it is the brand name or logo that the item has. Brand-name items do have an effect on our economy. If consumers are buying brand-name items rather than the generic brand then they are going to spend more money which is more money that is out back into our economy. This is why consumers need to check reviews to see if it is worth it to buy the brand name. Best buy checked a review on their televisions, it was shown that Samsung televisions scored a 94% and Dynex televisions scored a 90%. Consumers would most likely spend more money on the Samsung because of the higher review and because it is a well-known name. However, it would be more realistic to by the Dynex. Although consumers would be spending less which is less money for the economy, they would be saving more money for themselves.
"How Does Brand Name Affect You?" MoneyNing RSS. N.p., n.d. Web. 09 May 2013.
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