There are several factors to consider when it comes to correlating the economic status of the U.S. and the fashion industry that we encounter every day. One factor is connected directly to the time of year and year itself. Back in 1996 and now in 2008 elections were/are being held to determine the next president of the United States of America. As mentioned in the Politics Section of our blog, the current candidates are Senator Barack Obama and Senator John McCain. Both candidates speak passionately about America’s main concerns such as Social Security, tax cuts, and primarily the economy. Right now, America is not only experiencing the harsh blow of a recession but our situation with the market and financial institutions has been described as “the worst financial crisis since the Great Depression.” How does this relates back to the fashion industry? Everything from apparel sales to the actual designs that struck down the catwalk this season are affected by the economic outcome in the U.S. American consumers have curbed their spending in recent months as a decline in the housing market has taken hold. Shopping over the Christmas retail season (2007) was the worst in five years, e
ven hitting luxury names like Saks, Tiffany and Richemont, parent company of Cartier, Van Cleef & Arpels and other top-end brands. This has forced designers and retailers alike to cut spending on a advertisements, textiles , and employment. Aside from cutting orders, the economy is also influencing the designs themselves, some designers say. "If anything, people will be more desperate to get attention that they think is going to generate business," said David Wolfe, creative director of Doneger Group, a New York trend forecasting company. And because of the hype of the election, more designers are incorporating red, white, and blue colors into the designs in hopes of seeing an increase in interest in both fashion and politics.
ven hitting luxury names like Saks, Tiffany and Richemont, parent company of Cartier, Van Cleef & Arpels and other top-end brands. This has forced designers and retailers alike to cut spending on a advertisements, textiles , and employment. Aside from cutting orders, the economy is also influencing the designs themselves, some designers say. "If anything, people will be more desperate to get attention that they think is going to generate business," said David Wolfe, creative director of Doneger Group, a New York trend forecasting company. And because of the hype of the election, more designers are incorporating red, white, and blue colors into the designs in hopes of seeing an increase in interest in both fashion and politics. Because of the economic fall out in this past year, retailers look to past to conduct a proper forecast for sales and marketing performance. According the the WGSN website, The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research, 72% of online retailers believe that online is better suited to withstand an economic slowdown than offline channels and find an optimisitc outlook for online shoppers. This optimistic outlook is driven primarily by past results. According to the report, 81% of online retailers surveyed reported that their e-commerce business was profitable in 2007, and 75% were also more profitable last year than in 2006. Almost half (49%) of online retailers said that their average conversion rate in 2007 was higher than in 2006, and that 36% of total sales for the online retailers were driven by repeat customers —higher than in 2006. However, despite the projected forecasts for the effect of the economy on the fashion world, the report advises that online retailers must still execute well to capture possible sales. Additionally, it cautions that those sales may not necessarily be the highest-margin revenue due to increased input costs and the pressure to offer promotions such as free shipping.
In 1996, however, the economic stimulus was looking much more positive in more ways than one. Indeed was an election year and it was determined by many that the deciding factor in the presidential campaign between Bill Clinton and Bob Dole would be the economy and how each candidate would improve on it in the next 4 years. And while the economy was not in full blown recession as is happening now in 2008, the fashion industry still relied heavily on the economy’s ever-changing direction to determine what would be in or out.
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