Tuesday, November 04, 2008

Calling All Recessionistas!

The Economy Getting You Down?

You May not have to Worry as Much as You Thought!

For a while now all we have been told is to cut down on spending because we are in a recession. Are economists just scaring us or should we be worried? Should our fashion have to suffer because the economy sucks?

According to Gary North, Author of Mises on Money, “In recessions, fear grips consumers. They start looking for ways to cut back on spending”. The funny thing is that this fear seems to be mainly propagated by economists and the government. The ones who should be doing everything they can to reassure their country they can pull through this slump. They print articles on the need to be frugal, pretty much scaring us all into an early mid-life crisis! How many times in the last little while have you read an article about the recession encouraging consumers to spend less and make cautious decisions when it comes to purchases?

It is true there are potential consequences of the recession we should consider. A friend of mine was recently laid off from her part-time retail job at Le Chateau of which she worked on commission, because her ‘productivity was low’, “They wanted me to be selling $1500 an hour!” She exclaimed to me. I started in surprise. How on earth could one person sell that much in one hour? Especially in the midst of a recession! It’s not like she was working for frikkin Chanel!

This proves there are a couple of consequences we should still consider: job loss, a weak job market upon graduating, and the possibility tuition could rise depending on the length of this economic uncertainty. We should remember the impact of this recession in our later years so that we can make better financial plans for the future (because recession is always going to be around).

However, the amount of fear we should have for this recession should be directly proportional to the amount we have to potentially lose. Since we are students, most of us do not own houses and therefore do not have to worry about the value of our homes going down. Furthermore, most of us do not yet own big businesses that could pull us into debt, nor do we have much (or even any) stake in the stock markets. Since we have less to worry about, we shouldn’t restrict our wardrobes if we find a great deal on something special!

Since consumers seem to be listening to the economists warnings not to spend, is it possible to get your shopping fix and still ride out the recession practically unscathed? The answer is sad for businesses, but great for consumers! In an article titled A Black Friday like no other: How the economy is changing Black Friday, Dan de Grandpre CEO of dealnews.com says, “Make no mistake: Thousands of jobs are at stake, and so many stores going out of business is bad over the long-term. But in the short term, these stores must liquidate their inventory. Consumers benefit from liquidation sales.” Now wait a second. Aren’t economists telling us to spend conservatively? Isn’t the whole notion of a recession that we need to cut down? Well some of these sales may be too good to give up! I say, shop smartly. If you need new clothes don’t forbid the shopaholic in you from prospering, just make sure you find the best markdowns!

Since people will not be splurging like they used to, high-end labels will be hit hard by the recession. The solution, accessories! Designers will be marketing their handbags much more because they are cheaper then their other products. People may still buy an expensive bag if they realize it will last a long time and will far surpass the outfit they wanted that was more expensive in the first place.

So what else are high-end labels and brands doing to stay afloat? Not surprisingly, slashing their prices like everyone else! “Look for overpriced brands like Ralph Lauren, Coach, and Gucci to be dramatically discounted… at Macy's, Saks, and their own retail outlets. Saks is running web coupons that apply to high-end brands, a rarity. Even Tiffany is pushing free shipping deals,” states Dan de Grandpre. Of course labels will always be around but it’s good to know you may now be able to get that amazing Gucci bag for a steal!

I have always been somewhat of a bargain hunter myself and usually head straight to clearance in my favourite stores first. It seems this may become an even more popular trend for the itching fashionista; only in this case it’s time to become a recessionista! Someone who embraces the recession not as a time to be stingy with their wardrobe, but to embrace the discounts (both designer and non-designer) that will likely be popping up out of nowhere. So what are you waiting for? Now just may be the best time to update your wardrobe!

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