"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.
Black Friday Shopping
An event that comes along once a year and impacts Americas economy is…the Black Friday shopping event. Black Friday is a major shopping event that occurs in several places in the United States. Black Friday is when retail stores have their biggest and best sales; shoppers come and wait for the doors to open at the shopping malls. Last year in 2012 alone, $59.1 billion dollars was spent by consumers. Each consumer that went out to shop on Black Friday was spending roughly $423 dollars, which was an increase of $25 dollars per person last year. With this kind of spending it is helping the economy grow. However, it can also hurt the economy because it could send people into debt if the money they are spending isn’t accessible to them because they are already in debt.
Weekend, Customers Flocked in to Early Store Openings on Thanksgiving Day to Scoop up "doorbuster" Deals. About 139.4 Million Adults Visited Stores Websites over the 4-day. "Black Friday: Spending and Number of Shoppers Hit Record Highs." CNNMoney. Cable News Network, 25 Nov. 2012. Web. 09 May 2013.
Small Business Help Economy
It is not easy to be a small business owner. If the economy is good then owning a small business is good, however, if the economy is bad then owning a small business isn’t the best thing. Small businesses contribute to our economy. Small businesses are considered to be more innovative to our economy. They have values, solutions, and are finding new ways to meet the needs of consumers. A small business is not determined by the number of employees it has or by how long it has existed, it is determined by its place in the economy. Small businesses do help with economic growth just like any other larger company could. An American Gov. journalist stated that small businesses produce 13 to 14 times more patents per employee than do large firms as far as terms in economic innovation.
"How Small Businesses Contribute to U.S. Economic Expansion." How Small Businesses Contribute to U.S. Economic Expansion. N.p., 03 Jan. 2006. Web. 09 May 2013.
Online Shopping Increases Spending
One of the greatest inventions ever made was the invention of the internet. The internet has a huge effect on today’s economy and always has. The internet has so much to offer not only the country that you live in but also the countries across the globe. Online shopping has become very popular. In 2012, 70% of consumers, ages 14 and older were online shopping. The percentage only continues to grow as holidays approach and events such as Cyber Monday happen. Having at least 70% of consumers shop online is more money that is put into companies which is then put into the economy. It doesn’t matter how consumers are spending their money, whether it is at a shopping center or online, the economy needs consumers to spend money.
Palis, Courteney. "Internet Economy: How Essential Is The Internet To The U.S.? (INFOGRAPHIC)." The Huffington Post. TheHuffingtonPost.com, 20 Mar. 2012. Web. 09 May 2013.
"Data Points: Spending It." AdWeek. N.p., n.d. Web. 09 May 2013.
Thrifting to Save
Thrift shopping has been a common for many years. “Thrifting” is a term that is used to describe shopping at second hand stores such as Goodwill or Plato’s Closet. Second hand stores do affect our economy for many reasons. One, consumers are getting rid of all of their old clothes or unwanted clothes that they don’t want any more so they can go spend money and buy new clothes that are in style. Two, when consumers give their clothes to places like goodwill, then consumers are contributing to the income of the company and allowing other consumers to buy their old items at a lower price. Three, stores like Plato’s Closet even pays consumers for the items that they take from them, which money back in the consumers pocket to go spend. A Huffington Post article was released this spring that stated that 20% of consumers now shop at thrift stores compared to only 14% of consumers did in 2008. Thrifting is becoming more popular for all people.
Gibbons, Jim. "Thrifting Across America." The Huffington Post. TheHuffingtonPost.com, 19 Apr. 2013. Web. 09 May 2013.
Celebrities Make Consumers Spend
Lauren Conrad is a fashion icon and was once a reality television show star on The Hills and Laguna Beach. Just like consumers follow trends, they also follow the styles of celebrities such as Lauren Conrad. Lauren Conrad who is now a fashion designer is an example of how celebrities impact the economy. Because Lauren sells her line of clothing at Kohl’s, she gains profit from consumers just as Kohl’s gains profit from consumers who purchase Lauren Conrad clothes. Lauren Conrad’s brand, ‘LC Lauren Conrad’ is 1 of 37 brands that is sold in the women’s clothing department in Kohl’s. This means that whatever profits that the brand makes; Kohl’s makes some portion also. With consumers buying a brand-named from a department store it helps increase the economy because consumers are spending money. Kohl’s also uses Lauren Conrad as a way to advertise to help people come and shop at their store.
"Kohl's." Kohl's. N.p., n.d. Web. 09 May 2013.
The Fashion Industry Creates Jobs
The fashion industry has many careers such as designers, photographers, models, fashion editors for magazines, stylist, store owners and the list goes on. Depending on where the economy stands depends on what jobs and how many jobs will be available in the industry. If the economy is unstable and designer’s products aren’t being bought, meaning the chance of getting a job in the industry is decreased. In 2009, availability of jobs in the fashion industry dropped 9% because of a fall in the economy. This left people without jobs and without pay checks which would affect the economy because they wouldn’t be spending money as much or as carelessly. However, if the economy is doing well that then leads to more spending and additional jobs being available. If more jobs are available then that gives new opportunities for people to get a career and starts to make their own income.
"FASHION INDUSTRY." Fashion Industry: Jobs. N.p., n.d. Web. 09 May 2013.
"The Fashion Industry Sinks in the Global Economic Downturn." The Comment Factory RSS. N.p., n.d. Web. 09 May 2013.
Runway for Cheaper
Everyone knows the differences between a designer garment and a replicate or “knock off” designer garment. A designer garment is going to be the one that is seen on the runway and is more expensive. A replicate is a garment that is very similar to the original designer piece but is cheaper. Replicates of designer garments affect the economy in a different way. It allows stores to sell a product that people want because it is similar to the original piece. In 2010, an article was released by Rhian Nicholson which discussed this very topic. The article stated that 80% of replicated goods by the store Debenhams, were accounted for in stores since they put their own label on the replicated design, or as they called it “own-labeled range.” The replicating of a runway design allowed for new stores to open up and expand which affects the economy because now there will be more jobs and more consumer spending.
"Fashion's Impact on the Economy." - Shopping & Vouchers. N.p., n.d. Web. 09 May 2013.
Trends of Fashion Effects
Fashion trends have a large impact on the economy. Consumers are all about wearing the latest trend when it comes to fashion. For example, a trend for the spring of 2013 is sporty dresses. Female consumers are now going to make it a priority to look for and purchase sporty dresses because it is the latest trend. Meaning, if sporty dresses are being purchased in local department stores then it is helping the department store make a profit which then relays into the economy because people are spending money. The money that the consumers are spending on sporty dresses is going to the companies that manufacture and deliver the goods as well.
"Spring 2013's Most Wearable Fashion Trends: Fashion: Glamour.com." Glamour. N.p., n.d. Web. 09 May 2013
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