You'd think it was common sense, but I've officially understood that an economic depression is simply this: depressing. When everyday people are worried about their personal finances and the vitality of their future, the psyche becomes battered and bruised. Whilst those feelings are never en vogue, there are several positives from this negative economic reality.
Firstly, we must benefit from this teaching moment. Most people under the age of 50 have never really felt an economic pressure like we've experienced over the past few years. We didn't really have to worry about money, our financial stability, or whether or not we could pay our bills and provide for our families. But on some level, no matter how great or small, we've all felt the pinch in our pocketbooks.
I've said before that I really think the economy has done the retail industry a favour - it has eliminated the retailers who weren't at the top of their segment in customer service, shopping experience, selection of inventory, and customer friendly policies and procedures. Circuit City was never Best Buy. Additionally, those "museum shoppers" or people who would constantly come in to a store but never buy anything have stopped the playing the game of "just looking but not buying" and allowed associates to focus on their actual potential clientele.
With that being said, I'm really excited for those individuals who have and are still able to stimulate the economy and promote growth through shopping and commerce. The luxury industry has felt the pressure for sure, but the most successful and prominent brands have readjusted their approach to recapture, redefine, and refocus on their actual demographic and clientele. Designers have strengthened their visions and honed in on brand heritage and history. After all, fashion is the ultimate fantasy and escape from reality.
Luxury brands in particular are investing more than ever to cater to the needs of their clients. With unprecedented access through internet sites and ecommerce portals, companies like Burberry, Gucci, and Marc Jacobs are increasing their profits and intensifying brand identity constantly through virtual stores and the most mesmerizing multimedia campaigns.
Companies are also taking chances to further their positions and leverage their business. Marc Jacobs has intensified his identity and shaped his consumer's lifestyle choices with his bookmarc bookstores. When designers offer consumers an opportunity to live the life, everyone wins. When you sell the lifestyle, the emotion, and the romance, product suddenly flies off the shelf. For example, I could tell you that the Lady D collection from Christian Dior is a trendy handbag with a quilted pattern and looks great for all occasions. Or I could tell you that the Lady Dior collection was created in 1996 at the request of Madam Chirac for the eternally elegant Princess Diana to serve as a symbol of France, and that quilted pattern is called Cannage, a Louis XVI print that was found on the gold gilded chairs in Christian Dior's original main salon. Suddenly the bag is not just another bag, but a piece of art and history, a focus on fabulosity if you will.
Another great economic lesson - better quality goods are more expensive than their cheaper counterparts, but are often longer lasting. US$250 for a pair of Diesel jeans might seem expensive at first glance, but when you're still wearing those jeans 10 years later, the investment suddenly seems more reasonable when you consider paying just US$25 per year for amazing denim.
Economic distress also forces companies to re-evaluate their business models. When money is no object, customers are more inclined to spend more frivolously. Designers can sell anything and everything with their name or a logo. Marc Jacobs sold pet gear called Bark Jacobs. Dior sold baby bottles and other infant items. Versace sold a helicopter. But when the buyers dry up (or start being a little wiser with their money!), designers refocus on the more lasting categories.
Hopefully, we're saving more money than we might have before. Having immediate availability and access to cash and assets is incredibly important. A small nest egg in the bank is the new must-have accessory. Additionally, quality and value now play an even more important influence when making purchases - from basic necessities to the most exclusive of luxuries, customers demand the best quality their money can buy. What do you think?