RECESSION: SAVE OR SPLURGE?
by Reese Gorman
No matter how you try to avoid it, we can all agree that the economy you are in will affect almost all things in your life. Whether that is school, work, budget flexibility, eating habits, etc. The life of fashion is not excluded from the adjustments that must be made when dealing with producers’ and consumers' pockets looking a little different.
Looking back at the fashion industry in times of historic economic collapse, you see common themes and why the fashion industry always seems to make it through. There are two common denominators fashion has used throughout all troubling U.S. financial periods: maximization and new trends. When times are tough, you use what you have to the best of your ability. This can be seen in companies creating items that carry over to their next season's wardrobe and are very versatile. That way, you may not completely splurge on every summer color, but you’ll buy that cute skirt that you could totally pull off in the spring as well. The much more fascinating facet of adjustments that the fashion industry makes is trendsetting. Styles themselves come from a time of economic struggle. The only way to get one to pull out their wallet when there isn’t much in it, is excitement. Why do you think these businesses have the ATMs right next to the entrance of a good time? Presenting innovative styles and trends in a time of economic struggle is a common strategy of the fashion industry to rope in clients that they may lose otherwise. Value driven mid-luxury brands are usually in the driver seat of fashion into new waves. Look no further than the neon, abstract print looks in the 1980s, or the 2008 indie, punk sleaze. Companies shift their style and create a new “it thing” that will allow new interest.
Looking at the macro-spending of consumers during an economic downfall, people are affected very differently. Retail spending seems to take the biggest hit, as with that affecting the producers and companies directly. The spending of high-class fashionistas is not very different. As those who can afford Louis Vuitton, usually still buy their Louis Vuitton. Mostly, as in most industries, the middle class is affected heavily, as these less expensive buyers must stop spending unless the product is necessary, like a winter jacket, or is innovative, as we discussed earlier.
All brands are hit heavily by an economic recession. Just as most things in life, it is about how they respond. The brands who seem to thrive and survive, are the ones that had high creativity change, innovation, and reinvestment rates. As bad as they may seem, winners come out of economic downturns all the time, so be on the lookout for the maximizing, innovative companies to rise in these trying economic times.