Consumer greed accelerates the economic growth of any industry. However, sometimes the growth becomes unsustainable and compromises the social justice aspect of any economies. It causes an increase in the quantity of product produced and demands for the improved labor force to meet the effect of the consumer behavior. The behavior also demands an increase in capital stock and use of natural resources (Hahnel, 2014, p. 44). In this paper, we will research and discuss the effect of these changes on the finances of a business in the fashion industry.
Fashion is an expression of modernity and expresses the moods at different times. Consumer greed is therefore inherent in the fashion industry as consumers are driven by the need to protect their brands, have products fit their style, color, preferred fiber and so on. Consumer greed increases the demand for certain clothes and accessories. An increase in the order automatically implies an increase in the level of sales. Hence improving the revenue means an improvement on the financial statements of the said company and a general rise in the growth of gross domestic product (Horvath, Roman, Coricelli, & Fabrizio, n.d., p. 415).
To sustain this kind of growth requires the fashion professions to improve quality and quantity of labor. The improvement effects are traced to the financial performance of operations where the wage expenses increase within the design and production departments (Putit, Teoh, & Amily, 2015, p. 214). The demand also causes the cost of sales as there is an increase in the amount textile used in making the clothes and accessories. Ability to meet the demand requires crop production to be increased for instance cotton and sisal. The growth may cause environmental problems especially on pollution of natural water sources when these factories drain the dye of the textiles into the rivers and other water bodies. It means that the fashion designers have to make tradeoffs that reduce the overall collision of the demand and the environment which can be expensive.
Consumers agreed demands that fashion designers invest in technologies that continue to satisfy the dynamic requirement of the consumer. Some of these techniques are quite expensive and quickly becomes obsolete the preference of the consumers change (In Parumasur & In Roberts-Lombard, 2015, p. 412).
In conclusion, consumer behavior profoundly impacts the finances of the fashion industry. This is because the consumer dictates the type of product he wants and how he wants. It leaves the designers hanging by a thread hoping that their strategies meet the needs of their target customers.
Hahnel, R. (2014). The ABCs of political economy: A modern approach.
Horvath, Roman, Coricelli, & Fabrizio. (n.d.). Price setting and market structure: an empirical analysis of micro data in Slovakia. (Managerial and Decision Economics.
In Parumasur, S. B., & In Roberts-Lombard, M. (2015). Consumer behaviour.
Putit, L., Teoh, K., & Amily, F. (2015). Consumer behaviour. Shah Alam, Selangor: Oxford University Press.
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