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Essay: Why Fashion and the Economy Are Closely Interlinked: A Review

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As commonly known to most, fashion is cyclical in nature.

  However, it is a little less obvious as to why fashion cycles in this manner. There are various factors assisting to it, such as: cultural trends, politics and celebrity influence among others.

One of the most surprising factors that influences the fashion cycle though, is, the condition of the global economy. Which actually makes sense. Whenever the financial condition is on a low, fashion is one of the first habits a person would give up. Budgeting and saving money is then, more important than being trendy or fashionable.

For various centuries and fashion cycles; the economic system, condition and methods of transaction have affected the styles and designs of fashion as we know it. But, this has been a very understated and unacknowledged factor affecting it when it actually really holds a lot more relevance and importance than is admitted. I will be discussing and covering some of the facts that may make us realize how strongly fashion and design factors owe their development to the money and transaction system. Furthering which, I will delve into the aspect of approaching a cashless society and like the times before, how it may change the look and feel of fashion and design.

So I hope to ‘un’cover some of the new fashion styles and designs which may be our future with the changing ways of life, economic situation, adapting to technological- more convenient ways of money and transaction and adopting new habits whilst excluding a need for the old ones.

Literature review

Fashion And The Economy

Through tougher financial times, if you need new outfit’s, the interest is less on passing fads and more on classic styles because they will last much longer and also cut down on cost per wear.

As FIT professor John Mincarelli tells ABC News, “In rough economic times, people shop for replacement clothes,” adding “basics” prevail during an economic downturn.

In fact, the economist George Taylor was the first to realize the correlation between fashion and the economy, he wrote the “Hemline Theory” to explain his findings.

The Hemline Theory suggests that women’s dresses rise higher when stock prices rise. In times of good economies we get miniskirts (as seen in the 1920’s and the 1960’s) and in bad economic conditions like the 1929 wall street crash, hems can drop overnight. Non-peer-reviewed research in 2010 supported the correlation, suggesting that "the economic cycle leads the hemline with about three years".

During the 1920’s, he realized that hemlines had shortened so that women could flaunt their silk stockings. However, once the market crashed long skirts became required by etiquette and current fashion. The reason being, with longer hems women could hide that they weren’t wearing and couldn’t afford stockings anymore.

However, the length of skirts wasn’t the only indicator. Some, like the Estee Lauder chairman, Leonard Lauder believe that the sales of cheaper products are the best indication to the state of the economy. At times like these, small splurges like lipsticks and perfumes increase because the higher expense indulgences seem uneconomical and unrealistic.

The height of heels too gives an idea about the state of the economy. “Usually, in an economic downturn, heels go up and stay up — as consumers turn to more flamboyant fashions as a means of fantasy and escape.” Such as, the height of heels at the time of the 2009 recession when it was at its peak was also at its highest with a median of 7 inches.

So if we apply this information to recent runway fashions we can understand a lot about the current economic situation and the projected future of the economy as well. As, fashion and styles are constantly repeating themselves based on the economic situation of the time.

All-in-all though, the economic condition definitely impacts fashion strongly.

Functionality Of Clothes In Fashion

  When we wake up in the morning and get dressed we don’t think about why we are wearing clothes or how functional they are for us in life. We don’t wonder why each element on our outfit is designed and placed the way it is or even exist on our outfit where it is and why it is. We barely ever stop to think of who made them, where the fabric came from or what message is in the design. These tiny little detail’s are what give clothing functionality beyond appearance.

Clothing, along with other elements of design and fashion has two main principals: functionality and aesthetics. Arguably, aesthetic attraction is a functionality of an object, but I would like to distinguish between them for better understanding of this exposition. A product is functional if it is easy to acquire, maintain and use. Whilst functionality is a little subjective; aesthetics is more subjective, especially depending on the product and individual in question. For every individual they maximize the combination of both, for some people however, aesthetics of clothes is of much higher precedence.

There are various basic elements in our clothes which we fail to realize forms the entire structure and basis of design in our outfits. Simple things like, pockets, zips, buttons, hoodies, etc. make for the basic designing idea of clothes. Apart from these, all clothes in their entirety are made for specific uses- running wear, gym wear, casuals, night suits, professionals, party clothes and the list goes on. Now, what we must stop to consider is that all of these categories and functions did not just come in overnight- it was over a period of time that when people realized a need for them that they started to be created. However, if the needs of the people changed and certain elements were to be dismissed then the entire look and design of all categories of clothes would probably change.

If the most basic requirements from clothes such as, pockets and zips were to disappear, our clothes wouldn’t need to be structured the way they are, at all! And say for once, if pockets and zips were still part of our outfits but did not have a specific function, rather, just an addition on our clothes for styling and adding interesting elements then there’s soo much more that we could do on the designing and styling front… it’s a world of options waiting to be explored! So, once you start thinking along these lines, a person really wonders why fashion trends repeat themselves when there are so many options that are still unexplored.

So I hope to ‘un’cover some of the new fashion styles and designs which may be our future with the changing ways of life, economic situation, adapting to technological- more convenient ways of money and transaction and adopting new habits whilst excluding a need for the old ones.

Evolution Of Money: From Barter To Bitcoin

Over its vast history, money has been central to developing our modern international trade networks. However, research has revealed that history is coming full circle with, 80% of the people admitting to bartering with a business rather than using money.

9000 BC

Early man would barter goods they had in surplus for ones they lacked. Grain and cattle were popular goods to barter. Bartering was first recorded in Egypt.

1100 BC

In China, people started using small replicas of goods cast from bronze. Largely for practical reasons, these developed into rounded coins. Coastal regions around the Indian Ocean saw the use of cowrie shells in trade as early as 1200 BC.

600 BC

The first official currency was minted by King Alyattes of Lydia in modern day Turkey. A standardized coinage allowed trade to flourish across the Mediterranean world.

1250 AD

The Florin, a gold coin minted in Florence, was widely accepted across Europe, encouraging international commerce.

13th century European clothing featured long, belted tunics with various styles of surcoats or mantle in various styles. The man on the right wears a gardcorps, and the one on the left a Jewish hat. Women wore linen headdresses or wimples and veils, c. 1250

http://www.medievaltymes.com/courtyard/images/maciejowski/leaf15/otm15vd.gif

1290 AD

The travels of Marco Polo to China introduced the idea of paper money to Europeans…

1661 AD

… However, paper money didn’t catch on for quite some time with the first bank notes being printed in Sweden. Paper money was great for business because it could be mass produced without relying on raw materials like gold and silver.

1860 AD

Industry giants, Western Union, spearheaded e-money with electronic fund transfer via telegram.

1946 AD

John Biggins invented the ‘Charge- It’ card, the first Credit Card.

1967 AD

The first Bank Cards were introduced as ATM cards which were issued by Barclays in London thereafter, by Chemical Bank in New York in 1969. In 1972, Lloyds Bank introduced the feature of a magnetic strip which encodes-information using a personal identification number (PIN) for security.

1981 AD

Internet Banking came into the picture. What we consider online banking actually came into the picture in 1981 when New York, in US, was the first to test the innovative way of doing business by offering four of its major banks- Citibank, Chase Manhattan, Chemical Bank and Manufacturers Hanover- internet banking’s access, making it available to their customers.

1994 AD

When Amazon was founded and Pizza Hut started accepting online food ordering. The first delivery system was initiated then. Moreover, the main players in the e-payment markets were Millicent (founded in 1995), E-Cash or CyberCoin (both in 1996).

Micropayment systems were being used by a majority of the first online payment services but with their common attribute being the implementation of the electronic cash alternatives (e-money, digital cash or tokens).

1999 AD

European banks started offering mobile banking with primitive smartphones.

2002

The Euro began to circulate worldwide.

2008

Contactless payment cards were issued in the UK for the first time.

2014

With a constant demand for ways to ensure businesses can trade easily new innovations are constantly being introduced and refined..

– Barclay trialed, wearable contactless wristbands.

– ApplePay was announced for iPhone users to enable them to pay for things with their handsets.

– History comes full circle with Bartercard offering a platform for businesses to barter surplus goods and services worldwide.

– Bitcoins entered the mainstream, the first fully implemented decentralized cryptocurrency.

Bitcoin: Age Of Cryptocurrency

Bitcoin is a digital currency of the 21st century. It is a cryptocurrency that is now accepted worldwide particularly in digital payment structures. Bitcoin uses a format which is peer-to-peer and wherein transactions can take place straight away between users without any intermediary bodies. These transactions go through and are verified by the help of network nodes and are recorded in a publicly spread ledger called the blockchain. Bitcoin was invented by a person names Satoshi Nakamoto, as, an open source technology which was released in 2009.

Cryptocurrencies like Bitcoin are becoming increasingly popular as the latest form of money because it has no intermediary or third party involved to permit the transactions. It handles direct transaction between two people using its peer-to-peer technology and it apparently has a non-hackable blockchain ledger system.

After the inception of Bitcoin, the first successful cryptocurrency; various other cryptocurrencies have also developed. They are slowly being adopted as the official legal tender various territories and countries like the European Union, Nigeria, South Africa, Zimbabwe, Namibia. Transactions through cryptocurrency have also been accepted in America. India has not yet regularized cryptocurrency so, the people are involving themselves in buying and selling of it. However, there are some countries that have passed regulations against it so we can definitely assume that cryptocurrencies, the same as digital money are here to stay and help transform the idea and identity of money and transactions further.

Approaching A Cashless Economy

A cashless economy refers to an economic state in which monetary transactions are not carried out with the means of physical banknotes or coins but through the transaction of digital money (usually an electronic representation of money) between the parties. Cashless societies are not a completely new concept, they have existed in the form of barter and other methods of exchange and in today’s modern day cashless transactions have become possible through digital currencies like, Bitcoin. However, the focus remains on the move towards “cashless society” where legal tender exists, is recorded, however, is exchanged only in electronic digital form.

This concept has been and is being discussed widely, specially because the world is witnessing a fast and increasing use of digital methods in managing, recording and exchanging of money in commerce, investment as well as daily life of the people in various parts all over the world. Transactions which would have earlier been processed through the medium of cash are now happening electronically at many places and occasions. Furthermore, some countries have set legal limits on transactions and transaction values for non-electronic modes of payment.

Ministry of Electronics and Information Technology (MeitY), Government of India envisions a Cashless, Paperless and Faceless service across the country, specifically in the rural and distant parts of the country. In addition to this, MeitY envisions a common e-Governance system with the intension to offer an end-to-end transaction experience for the businesses, citizens and internal government functions, which incorporates getting access to services and making bills and receipts via electronic modes. The main committee on Digital India has advocated a targeted and time-bound approach to execute digital payments for the people across all the e-Services of Government Ministries and Departments. With regard to this backdrop, MeitY has a notified guideline electronic payments and receipts, meant for Central Public Sector Undertakings, State Governments, Govt. of India Autonomous Bodies, and Municipalities for efficiently and speedily executing the appropriate mechanism to allow electronic payments and receipts. The goal of this guiding principle is to provide tips for Departments to:

• Verify numerous services involving payments and receipts via types of services and level of enablement for digital payments.

• Providing easy instructions for global adoption of electronic payment methods through various different channels for each type of service

• Providing pointers on engagement with various different service providers

The guidelines of implementation of Electronic Payments and Receipts shall be through evaluation of the overall reputation of services offered by the department and compile a repository of services provided by departments. The use of this repository will be to check, measure and track the level of adoption of electronic payments across the sectors and departments in India. Furthermore, information on departments that require payments integration will be shared with the government as well as the private sector PSP’s (Payment Systems Providers) to enable the electronic modes and channels of payments.

The assumed future eventually being that the world that once held its earnings as commodity/ paper rather, tangible money has now quickly and largely moved to intangible money and credit.

The USA is approaching the 50% level where Americans and people all over the world have gone for a full week without even handling paper money or coins (latest number was 43%). As can be seen from the results in the questionnaire even India, the citizens are headed that way. Especially the younger generations go into various stores like Starbucks and hand their phone to pay via their E- wallets. Money as we know it is becoming electronic and intangible. Now that money is electronic, everything has changed and tangible forms of money are vanishing, heading off into the same place vacuum tubes went.

Fashion Revolutions

As there were evolutions in money, there were also very important revolutions in Fashion. A fashion revolution is a global understanding of a need for change in something that can be depicted through the means of clothes and dressing. It is a movement that calls for greater transparency, sustainability and ethics in the fashion industry. So, even though style and luxury seem inane and whimsical next to these matters that are larger than human causes, we must still remember that : What you wear is a part of your identity, and identity is, well, pretty darn political. Social movements, class, and our gender roles influence (intentionally or not) the way we choose to represent ourselves, and throughout history, revolutions have played out inside of closets, on feet, or by a hemline. As we all know, style can help affirm — or disrupt — the status quo (Leila, 2013).

So lets take a look at all the revolutions in fashion to understand how we reached the styles of today and its relation to the on-goings in the world at the times.

French Revolution

Starting with the The French Revolution, clothing and dressing style changed immensely and became much simpler. Especially for the women, the flamboyant show of wealth was no longer in fashion. Cheaper and inexpensive fabrics like Muslin became more accessible and anyone wearing elaborate gowns came across as an anti-revolutionary.

The revolutionary ideals were in fact, most visible in the Sans- Culottes movement. There was such a large shift away from the monarchy that anyone who even sparsely jarred their sense of equality was ‘suspected’ of being an ‘aristocrat’. The sans- culottes movement which literally meant “those without culottes” (fancy silk pants) stood for pro-labour and pro- equality ideals. "The sans-culottes often estimated a person's worth by external appearance, deducing character from costume and political convictions from character; everything that jarred their sense of equality was suspect of being 'aristocratic”, wrote the French historian Albert Soboul.

This set the start of revolutions in the world of fashion depicting political, economical, cultural and gender based relevance.

Digitalization Of Fashion

Fashion is a product of its times.

Every era in the fashion world has brought something unique and new to it. The geometric patterns were introduced in the 1960’s, we saw the earth tones, greys, whites and blacks in the next decade.

With the emergence of the digital age and easy access to technological products like mobile phones, social media and the internet, fashion has new context. Sales of clothes on the online platform have become as important as the offline store sales. The fashion world has been artistically, culturally, and commercially drawn into and involved in the digital world. Fashion trends are not just evolving faster but also connecting with people all across the world at a very high pace because of digitalization.

Ubiquity Of The Digital

The fashion industry is still undergoing an evolution and the industry is adjusting well to the digital innovations. The local brands as well as the high-end brands are accustoming themselves to it. As the channels for virtual and digital connection in the world are expanding, the barriers for entry are lowering, making it a completely global industry, specially with respect to the fashion industry. There are a few unnerving factors for some however, like rising competition, plagiarism, and the extended requirement to connect with the clientele as well as suppliers, manufacturers and employees.

The digital world has without-a-doubt proved to cause a boon for the fast fashion sector specially as there is much higher visibility assured by online portals. However, there are still certain high-end brands that are not present on the online portals simply because they feel that they will loose their exclusivity as a brand if they become so readily available and accessible to all. Some are also apprehensive of the rules and regulations that are different in various countries which may make the use of different digital platforms a little cumbersome. "Luxury is all about touch and feel. It is different from buying at the click of a button," said Sanjay Kapoor, MD at Genesis Luxury, which retails many luxury brands including Paul Smith, Canali, Armani and Bottega Veneta in the country.

Still, the fashion industry cannot ignore the major and outright benefits of the digital world specifically because a large part of the population checks out brands, styles, designs, and fashion trends online to educate themselves and get an idea as to what they are looking for.

Furthermore, it has been found that some of the biggest brand names in the fashion industry all over the world are also threatened by the online fashion market that is available.

Zara and H&M, two of the biggest mass producing, fast fashion brands are now being threatened by the online market as it is affecting their sales for the first time.

“Faced with online threat, H&M devoted 45% of its investment to internet in 2017, or close to €600 million ($736 million), for a new photo studio and personalized apps for its clients”.

“Inditex started having trouble clearing its stocks for the first time in 2017 due to competition from Amazon, which sells everything from books to clothes”.

Logistics investments, new technology… Faced with fierce online competition from the likes of Amazon, affordable fashion giants Zara and H&M are shoring up their defences, trying to use their stores to boost internet sales (Anon, 2018).

Separated by means of thin walls, 15 little photo studios have been set up that are to be used solely and completely for updation of the website line up in Zara’s huge headquarters near Corunna in Spain’s northwest region.

With a plethora of flashes of the camera, models constantly strike pose-after-pose to get nothing but seven photos of outfits shot under all lights and angles. A total of 1,500 pictures are posted online, twice a week to catch up to the pace at which the clothes are being replaced in-stores.  

“Online sales are becoming an element that is contributing significantly to the company’s growth,” said Pablo Isla, CEO of the Inditex group which owns Zara among other brands like Massimo Dutti, said this week at the annual results’ presentation.

In the year of 2017, 10% of the sales were represented by the online market, which is a figure that has been revealed after numerous years of secrecy by Inditex specially as they entered this sector quite late in 2010. Sergio Avila Luengo, an analyst at IG Markets, said gaining “more visibility online” was the main challenge for Inditex if it wants to remain “competitive on the long term”.

It is said that the fashion giant started facing problems for the first time in clearing stocks in 2017 because of competition from Amazon which that is selling everything a person can possibly think of.

For its own part H&M, the other fashion giant in the industry and arch-rival of Inditex realized that even they had a drop in profits in 2017, owing largely to the online retail market. The clothing market “is in big transformation,” CEO Karl-Johan Persson said in February. “It is happening fast and it is challenging everyone. “We know about the big online platforms, I’m thinking Amazon and (China’s) Alibaba, affecting our industry,” he said, adding smaller niche online players were also “a force to be reckoned with”.

Amazon already made it to the top online vendor for clothes in 2016. It is currently holding 11% of the global clothing market which is expected to rise to a rough figure of 19% by 2020, as compiled by the data of Bloomberg.

In the meantime German online clothing and shoes platform Zalando as well as Britain’s Asos, witnessed a leap in sales on their European front by 25% and 34% respectively between 2012 and 2015, as per the Ecommerce Foundation. Threatened by their success, “H&M devoted 45% of its investment to internet in 2017, or close to €600 million ($736 million), for a new photo studio and personalized apps for its clients”.

Even Inditex is speculated to be investing large amounts of money however, would not reveal how much.

Both companies are trying to delve into setups where they can offer next-day or even same-day delivery for online purchases as well as the possibility to pick up and return clothes easily to the stores. These services can be critical for clients however they represent a major logistics venture, in particular when faced with Amazon which already has “a much bigger logistics structure, already adapted to all sorts of different products,” said IG Markets analyst Avila Luengo.

To kick-start its counter-attack strategies, Inditex has already opened 19 warehouses in the world which are solely dedicated to the internet and are managed like stores. It is known that even H&M is going to follow soon. Both are trying to benefit from the thousands of existing stores, including, to add the service of client delivery.

When online sales are launched in new markets, “we get to profitability really quick,” H&M financial director Jyrki Tervonen told investors in February. He said this was “thanks to the fact we already have a store network, we are a well-known brand, appreciated among the consumers.”

Inditex has already invested huge amounts of money into the renovation and re-renovation of their stores including the shutting down of their small outlets in order to open large flagship showrooms specially in city centres and crowded metropolitan areas.

Both the companies are making intensive and extensive efforts to ensure that they don’t miss out on any sales by informing clients that if a product is not available in their size, they can find it avalaible on their online store. What they are essentially trying to do is, strategize their business model in such a way that they combine both online and offline stores in such a well-integrated manner that a client wouldn’t have to look any other way once they land there.

“Distributors that develop their stores and their online sales perform quite well,” said Gildas Minvielle, head of the economic observatory at the French Fashion Institute.

Repetition Of The Fashion Styles And Need For Change (Paraphrase)

Fashion Movements And Success In Changing Mindset

Influence Of The Fashion Industry On The People

The fashion industry is a constant topic that draws the attention of the people immediately at any point-in-time and anywhere. Each individual is so familiar with fashion in their own personalized way that he or she molds it according to their personal lifestyle, culture and comfort. However, lifestyle in the modern day and culture is largely dominated by the fashion industry without the people even realizing it; it does not just affect our clothing rather, influences every aspect of our daily life.

When people think of the fashion industry they simply associate it with concepts such as: glamour, fame, style, fancy lifestyle and everything exciting. Furthermore some associate it directly with: retail, manufacture, design and advertising. However, the fashion industry does a lot more than just that. The level of influence which the fashion industry has on our lives, habits and mindsets goes unacknowledged and undermined because we adapt to it at our own pace and comfort level so there’s no realizing it.

Fashion plays a prime role in our society. Designers get film stars to wear certain outfits as they decide what the next season coming into fashion ought to call for and preview it in such a way that they make the space in the viewers minds about what looks good and is fashionable. Every movie and television show decide very carefully what look they need to portray. Each ad may not be centered around or be about fashion but the clothes are a very subtle manner of catching the attention of whatever target market they are directed towards. And the people grasp onto this. If there is a message being sent through the styling of fashion, media publicity, advertising and famous faces it is being done with an outcome in mind which is, to get into the heads of the viewers; and does so quite well.

Fashion and mindset share a very subtle but close connection that makes it a very important factor in getting a message across to anyone relevant.

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