In a fragile economy fashion jewelry retailers may be worrying more than necessary. Yes, the news media continues its constant diet of bad news, but two major forces overcome all the media’s negative impact. First, the fortune of wholesale fashion jewelry is far more susceptible to fashion trends than the economy.
We could go through the entire history of economic downturns over the last 25 years and prove our point. Rather than put you through that boredom, ask a long term veteran in fashion jewelry what there best year was in the 20th century. Most will say 1990 or 1991. Surprise! These were recession years. Ask what their worst year was. Most will say 1995. The media was raving about the good economy that year.
The difference obviously wasn’t the economy. The trends for fashion jewelry in ’90 and ’91 were dramatic size and color. Wholesale fashion jewelry was booming and big earrings were the major thing. Good news! They’re back!
Now what about 1995? The news media was bubbling over with enthusiasm about the great economy. Meanwhile manufacturers, importers, and wholesalers of fashion jewelry were closing their doors. Fashion jewelry retailers were scurrying around for something different to sell. Why? Minimalism became the fashion trend. Small or no jewelry was the look. Prada lead the way with a simplistic line in neutral colors like beige, grey, brown, and black. The party was over for wholesale fashion jewelry and all the retailers that made a good living on these accessories.
Today’s fashion trends are far from minimalist. Dramatic necklaces and earrings have been in style and continue for the season coming up. Fashion trends are definitely on the side of costume jewelry. But will consumers spend the money?
That brings us to the second point-psychology. By now many may have heard about “the lipstick theory”. Estee Lauder noticed in the downturn of 1991 that lipstick sales increased in upscale department stores when high ticket items slowed down. This became known as “the lipstick theory” and concludes that women don’t quit buying, they just move into lower cost items.
This puts a new image on an old theory in psychology. Anyone that took some basic psychology courses may remember Abraham Maslow. He formulated a theory for human fulfillment called Maslow’s hierarchy of needs. Fulfillment starts with basic needs like hunger and thirst and moves up to safety and then the need to be loved. It is the rung above this that is important to the fashion jewelry business. That rung is esteem needs that include self-esteem, recognition, and status.
This is at the root of the feel-good feeling gained from acquiring something new. This is the tendency noticed by Estee Lauder and confirmed by Abram Maslow when he says “Man is a perpetually wanting animal”. There’s some joy in getting a new item, even if it is not expensive.
Certainly many have felt some pinch from the bad news propaganda that seems unrelenting. Will a slowdown continue in fashion jewelry? We have plenty of fashion jewelry history to look at that says no. We have fashion trends that consumers love with all the dramatic size and color that always spells success for fashion jewelry. We have the psychology that says the human spirit will always be searching for something new.
So if your business is fashion jewelry, relax and give your customers the feel-good experience they came to your shop to get. Feel confident everyone will soon be bored with bad news and the shock tactics of media will fall on deaf ears. Moderately priced fashion jewelry has a history of ignoring the economy and there’s no reason this year should be any different.