During a recession you see how everything is connected, if you did not already. Consumers lose money, consumers stop buying, businesses lose money, businesses cut advertising dollars, networks loose money, news stations lay off people, the news loses quality.
There are a hundred other scenarios you can make with numerous industries; especially the luxury market that was hit hardest in the retail arena. People who used to have big money don’t have it anymore, and people who still have some big money don’t want to become one of the have-nots. Hence, the cutting back on luxury goods.
As a result, some of the biggest labels had numerous sales and websites like Bluefly and Shop It To Me, and stores like DSW gained incredible merchandise. I remember when my friend Lauren and I first saw Bluefly.com. She didn’t understand the concept of discount designer goods. “I can’t imagine that someone who is willing to pay $1000 for a jacket is going to care if $300 is marked off it and the people who would care still can’t afford a $700 jacket.”
Since the company flourished, we assume there were designer loving wealthy folk who loved a good deal as well as the non-wealthy people willing to pay a lot once in awhile just to get a piece of the designer cake.
Nowadays I am curious if this type of site has gained another clientele: the consumers who used to be wealthy. To own yummy, expensive designer goods for a period of time, whether a long duration or not, and then have the ability to purchase them taken away.
Are these people now scouring for designer discounts to satisfy their expensive taste? And now that consumers have seen such awesome sales both in store and online, how are they going to feel about paying full price?
The economy has opened people’s eyes when it comes to frivolous spending. No matter your income people have seen the result of spending too much or spending what you don’t have. The recession has tugged consumers back into reality and started even the well-off to start asking questions when shopping, “Do I really need that?” and, “Where can I get this at a better price?”
Needless to say, it will take time before luxury goods will be on top again. “[Consumers will eventually] feel better about shopping. It just takes time. It’s a combination of the economy, people’s retirement funds, people’s incomes and then it’s attitude,” says Howard Socol, the former CEO of Barneys New York. “This has been kind of a wake-up call. I think designers will try to produce things at better value. That’s a good thing.”
I have to agree. Let me know your thoughts on the matter, particularly if you were one of the wealthy who is not so much anymore. What is your relationship with the luxury market?
p.s. Gucci is having its summer sale right now.