Economic issues shape Fashion trends (up to writer’s choice)

How Economic Factors Impact the Fashion Industry and Trends
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Table of Contents
Introduction 3
Recession 3
Inflation 7
Conclusion 10
References 11
Introduction
Recession is the temporary decline or reduction in the trade and industrial activity. Inflation, on the other hand, is the rise in the prices of commodities accompanied by a decrease in the purchasing power. Just like any other industry, fashion undergoes processes such as production, manufacturing, distribution, and consumption. The processes named above intertwine heavily with industrial activity and purchasing of commodities hence the correlation between economy and fashion. Retail marketers are fully aware of the fact that sartorial trends are linked to socioeconomic cycles. The stock market is ever changing; the dollar keeps dropping, and the economy is very close to a recession. This article discusses the impact that the economy has on fashion.
Recession
Fashion is all about change, hence the constant factor: what comes next. The recurrent in nature of fashion is common knowledge. The subsequent shift in fashion tendencies does not only express the fabric and ensembles. It also potentially shows the change in the social mood and the economy. Though trend analysts try to propagate a different belief, no single person can irrefutably say how the next shift in the economy would look like. The concept of novelty in fashion doesn’t necessarily refer to the debut of a trend, but rather its renewal.

There are many factors at play in the cycling of fashion: cultural trends, politics, and celebrities. One of the most surprising factors to affect the cycle of fashion is the state of the global economy (Talley, 2012). When money is tight, fashion is one of the first items a consumer will compromise on to save money
The correlation between fashion and economics is not a recent development. It was discovered a while back by George Taylor, an economist who developed the “Hemline Theory,” which gave a detailed description of his findings (Authority, 2014). He noted that hemlines became shorter on women’s skirts as a way for them to show off their costly stockings, but when the economy went down, longer skirts became trendier. This trend emerged because women were not wearing stockings hence they had nothing to show off. Another indicator is the sale of cheaper products. Less expensive accessories increase in sales when the economy is weak since people tend to cut back on their spending.
We see flashy styles and trends dominating during times when economic growth is at its peak as a show of the consumer’s wealth. Embroidered patterns, expensive labels, statement pieces, and designs are a demonstration of the availability of money for splurging. “It is a clear indication that the economy” is at its peak (Aspers & Godart, 2013). It is important to remember that the fashion industry is heavily influenced by our economy, just like all the other industries. However, fashion relies heavily on credit for instance designers buy fabrics to produce expensive clothes which they will not be paid for at least six months (Aspers & Godart, 2013). The situation inspires retailers to find unique products that set aside their brands from competitors. Investors have increased prudence, and this creates opportunities for upcoming designers, as well as some established ones. Most consumers in the market are looking for uniqueness and wow factors.
So many factors have a significant influence the fashion industry causing it to be very cyclical in nature. This makes it difficult to maintain growth in income and profits in the long-term especially so during periods of economic instability. Some of these factors include; increased interest and taxation rates, unavailability of credits amongst other issues (Hasan, Subhani & Osman, 2012).Conflicts, terror attack, and instability also create significant uncertainty in the world and present adverse effects in the future. This uncertainty may cause consumers to defer purchases or prevent suppliers and service providers from offering required services. During the production process, it is of great importance to predict consumer demand otherwise the producers could end up with excess or insufficient inventories. This means that products should be supplied on a timely basis and they should be of great quality. People should also put strategies in place to ensure that the merchandising does not fail.
A Proper and correct anticipation of consumer trends does not suffice if the vendors do not supply good quality products. The materials used need to be impeccable and should strictly be delivered as scheduled (Hasan, Subhani & Osman, 2012). Marketing and merchandising are also vital to the process and should be done efficiently to ensure producers get decent sales at the very least. The factors named above could lead to adverse effects on the results of operations and financial condition. However, for the vendors to know the materials necessary for the project, it is necessary for the designers to show them samples of the designs and other materials in advance (Cline, 2012). Due to this obligation, the finished products might not be consistent with the ever-changing consumer tastes. Being able to buy clothes has always been used to define social classes. It is a way of showing the difference in the income levels of different and determining how classy and stylish a person is. For instance, a person working in an office with a high salary would be able to live comfortably on one salary. They would easily buy beautiful and expensive clothing as compared to a laborer who lives from hand to mouth.
Producers have come up with a way of reducing the cost of production which includes transferring some of the work to outside locations instead of doing it internally. Although this idea may not be the best since the finished product may lack the right enforcement from the government to ensure they meet the proper safety standards. There was an agreement in 1974 that has led to an increase in the production of clothes in the low-cost countries then transporting them back to the consumer nations (Huang et al., 2014). There is a likelihood of this leading to poor quality products and it’s safe to assume that the duration of the garments will be even shorter.
Modern-day fashion patterns are directly linked to lower quality of clothing. Different designs require different amounts of input in the manufacturing process, for example, a pair of jeans requires more labor than a tank top, therefore, it requires more time to construct (Huang et al., 2014). Due to high consumption rates, manufacturers have less time for the entire process hence they rush through the production, allowing room for mistakes, impaction, and poor quality production hence a shorter duration for the garments. Second-hand clothing also highly affects the cotton industry. Instead of people purchasing new clothes they opt for the cheaper ones sold at the second-hand markets (Haiven, 2015). This behavior reduces the income at the cotton industry since the number or garments they need to manufacture as per the demand reduces. A reduction in the quantity produced means reduced income which in turn leads to a decline in the economy. In an attempt to generate more income, cotton prices went up hence affecting the clothing sector.
Change in the locations for outsourcing may also present a threat to the quality of the finished products. The danger may come from factors such as water shortage, increase in manufacturing costs, and unavailability of raw material. It is possible that such changes will affect brands in terms of both the quality and pricing. An example of this is the Pakistani and Chinese producers moving their production to other locations to sustain their charge ambition whose basis is cheaper labor (Stewart, 2013). Many consumers consider price factors an indication of the quality of the garment, the higher the price, the better its quality. As a result of the rise in manufacturing costs, fashion prices will go up; hence the consumers will assume that the quality of production has also increased. The upsurge in production costs will affect consumers and could trigger overpricing.
Higher prices, however, make the producers scrutinize the products more. Smaller brands and designers may get away with low standards of production, low quality or even low costs but this is not the case for bigger brands such as Gucci. All costs considered, producing closer to home becomes more desirable financially. This improves control over product manufacturing (Stewart, 2013).However, this does not come without its challenges. “Producing closer to home reintroduces issues such as waste, environmental impact, fair wages and labor conditions that had been long forgotten about hence demanding solutions locally” (Stewart, 2013). Also, rebuilding production skills where they had been long forgotten can prove to be expensive, tiring and very challenging.
Traditionally, retailing clothes was a necessity, and for the majority, it was equated to splurging on practical items for covering up nudity and surviving extreme climatic conditions such as winter. Fast fashion has however democratized style; it changed the game plan completely. Spectacular dressing was a privilege for the well off. One cannot overlook this contribution. In recent times, the social gap is not determined by looking stylish; rather it is focused on who is classy and fashionable. This means that quality in production and design will be highly considered as an essential qualification for the fashion industry (Preston, 2013).
Inflation
Previously, inflation came at a time when there were notable improvements in the production sector. Inflation massively dominated the period before recession due to the rise in mortgages and house prices. This was good because consumers could withdraw money set aside to pay for their rent and housing facilities and spend it on clothes. It was also controlled by a rise in consumer demand that they allowed retailers to lessen prices and improve boundaries without blocking their sales. The contemporary situation is very different. Both consumers and retailers are affected by inflation since it is based on supply rather than demand. Price inflation appears to be going hand in hand with retailers adjusting how they splurge in an effort to reflect their financial reality (Preston, 2013). Before the downward spiral, consumers underwrote their expenditure via savings and credit, but this is no longer attainable. As a result, both sales and precincts are experiencing a lot of pressure.
Retailers view it as the global commodity price rumble, weakening of the sterling; rise in labor costs and increase in the scale have not been evident in recent times. This has, in turn, impacted on the demand twice: for instance, now that the consumers are spending less, the dollar has les purchasing strength. This means that retail volumes will fall rapidly into a negative space (Preston, 2013). Retailers have done great in maintaining low prices and maintaining their competitive edge through the slump, but currently, the pressure from inflation seems have an inevitable impact on commodity prices. Many retailers and producers have for a long time been cushioning themselves from the previous rises in cost by counterbalancing them via saving money in areas like supplier support or the redesign of products. “However, anecdotal evidence suggests that the ability and willingness to continue to do so is reaching its limits” (Preston, 2013).
Inflation does not affect all retailers in the same manner. Increase in prices of commodities affects consumer demands and cost of production hence inflation varies by location, means of operation and structure of production (Haiven, 2015). This means that how retailers respond to inflation is determined by the cause. Whether it is generated locally or internationally, inflation has impacts on the retail strategy. “Most retailers will never have encountered inflation against this setting, being much more familiar with a growth model based on decrease in prices and increase in volume” (Haiven, 2015). Retailers have limited experience of the correlation between volumes, price and consumers reaction to raising prices. Merchandising in such an environment, therefore, requires unique skill sets. Retailers have put in place strategic measures to deal with inflation. Latest outcome announcements indicate that the fashion chain opted not to exceed reasonable costs to customers and have in turn seen a considerable decrease in the profits (Haiven, 2015). They have presented a forceful argument that protecting its client base will strengthen its position, grow its market, and increase its long-term shares, even if it has to lower the short-term value of the shareholder.
Constant monitoring of the chain of supply and sources is crucial in this price-conscious period. This does not only track the supplier’s cost frameworks, it also manages commodity rise in the economies in which the producers are based. Pinpointing profitable clients and understanding their ever changing needs and demands is a major step for retailers in the contemporary market. From a tactical viewpoint, it seems more sensible to focus on the important factors such as; attracting customers, enticing them with irresistible deals then persuading them to purchase your products. There are different views on the projected duration of the inflation, but with the growth in the global population and rise in income levels of the middle class, there is likely to be an increase in commodity pressures in the long run (Haiven, 2015). In the short run, product costs may stop growing fast enough, but they are not likely to get back to the comparatively good price rises before the period of the downturn. As such, this will result in an essential change in the market operations.
Throughout the previous years, the cost of most of the purchases has decreased relatively. The decline is attributed to the advancement of technology, increase in the supply of commodities, and cheap labor. In the coming years, the rise worldwide consumption is likely to double that of the past, because of the massive growth speeds of the up-and-coming economies, increased population and increase in the number of middle-class people, who insist that consumption should be at the levels they are used to. People believe that the inevitable outcome of these changes in small fluctuation of prices will not come back and a structural and mental change is about to happen. The budding of “the retail market means that growth will not be” solely focused on volume (Braithwaite, 2014). Retailers should begin making plans on how to adapt to these changes. Enterprises will need to further seek more efficient ways to alleviate the impacts of inflation, and also embrace a more refined approach to evaluating producers and commodities. If the growing middle-class income translates to less desire for factory jobs, firms will have to be more flexible in sourcing.
Strategies for determining prices will be exclusively placed on retail business board agenda. The people who analyze and adjust starting price points will regularly compare them to sales to keep up with the delicate shift in disposition and behavior will eventually enjoy more success in safeguarding sales hence creating a gap between the losers and winners. The contemporary market urges vendors to embrace approaches that dwell on novelty to increase the productivity of their assets. Inflation may have benefited the vendor sector before, but the circumstances have changed. Now “it is supply oriented rather than demand driven, and it has come at the wrong economic timing” (Braithwaite, 2014).
Apart from the immediate problems it presents, inflation is call for the vendors to wake up and smell the coffee. It shows how and why they should be better at organizing for the future. It anticipates that the operation of individual businesses in the industry will undergo a substantial change in structure. The present volume development framework of retail is not reliable anymore. Results will most probably come from increasing the value the future consumer value. Business entities that are smart enough to begin looking at the visions for the company now and make the appropriate investment are much more likely to be successful. The retail market being controlled by the depreciation of income, opening out of space and growing volumes will become history. In due course, forms of retailer operation will undergo a shift as they strive to counteract rising costs occasioned by insufficiency of resources (Braithwaite, 2014). The ones that will “initiate their way forward, taking into consideration the long-term structural changes, as well as short-term strategies, will be successful” (Braithwaite, 2014).
Conclusion
In conclusion, one can predict fashion trends from the state of the economy. The fashion industry is directly affected by factors of the economy just like all the other industries. Recession and inflation present various challenges in the fashion industry but times are changing, and producers are developing ways to deal with such issues and ensure they are not affected by the same in the future. 

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