Today at TILE we talked about the impact that the financial crisis is having when you go shopping — sales, sales and more sales!  Consumers are demanding greater value, looking for special offers (e.g. gift cards), and challenging high prices (e.g. some designer clothes have been marked down by as much as 75% in recent months).

Wall Street Journal: Neiman Presses Designers for Cuts

While department stores, designers, and luxury brands benefitted from the “boom” in luxury consumption of the past, they are now feeling the pain of the downturn.  In other words, the stores and designers loved it when you bought a lot of expensive things and now they are hurting when you don’t buy as much.  Bain & Co actually forecast global luxury consumption would fall 21% this year.

In order to survive when customers buy less, firms make adjustments.  For example, Neiman Marcus is asking designers for lower priced items; designers are focused on smaller collections; and everyone is being more cost conscious.

Short-term, this is great for you, your friends and your family!  Maybe you can buy the special purchase you always wanted at a discount.  Even if not “officially” on sale, ask for a discount — I actually negotiated an extra 5% off of a large purchase from Barney’s the other day.  It never hurts to ask.

On the other hand, too many sales may not signal good things long term.  If people continue to buy less and the sales continue there may be negative consequences (don’t you always hate it when your teacher or parent says that term?):

- will your favorite designer or store be able to stay in business?

- will designers be able to  afford to be extra creative if they are afraid the cutting edge design won’t sell?

- will there be less variety to choose from?

On a personal level, are you starting to feel self-conscious about buying something expensive?  Do your friends react the same when you buy a new pair of shoes or a new IPhone?  While we often associate peer pressure with leading us to BUY, we are now in a place where peer pressure may raise your awareness during these tough times.

Have you been buying less?  Try going to the SPEND tab in TILE — in the transaction details take a look at what you spent on Clothing or Electronics a year ago versus today.    What are you noticing about your SPENDING patterns?  Is it more or less?

Just a little food for thought….

What are you noticing about your GIVING patterns?  Is it more or less?

- Amy