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The purpose of the paper is to address social media as a marketing strategy to manage market shrinkage in fashion and luxury markets. During the financial crisis of 2008, retailers faced a dilemma relating to both the economic environment and psychographic issues: how to convince consumers of fashion and luxury goods to purchase when even the wealthy cut back, and how to plan for spring when sales are declining at retail stores. To understand further social media, as a marketing strategy for managing marketing shrinkage for an upscale segment, a study was conducted on attendees of Mercedes Benz Fashion Week in New York to examine the relationship between social media and fashion and its relationship to fashion week. The author synthesizes extant knowledge on the subject, and provides recommendations for future research.
INTRODUCTION
During the financial meltdown in 2008, retailers were faced with a dilemma that is partly economic and partly psychographic: How to convince upscale consumers to purchase when the wealthy are cutting back? How to plan for spring when sales are off in stores like Neiman Marcus, Saks Fifth Avenue, and Nordstrom? Luxury goods seemed all but resistant to economic downturns. Even in Paris, the mood at the time turned cautious. Retailers informed designers they would delay orders for spring, and place smaller orders. Neither designers nor retailers expected improvements. Consequently, a growing number of designers sought new marketing strategies to appeal to customers' emotions.
Fast forward, after years of paralysis as a result of the recession, on Madison Avenue, a gage of New York retail health, business improved. Nearly fifty stores opened, including a diverse mix of European luxury labels, contemporary brands, hipper American designers, concepts stores, and long lasting stores (Wilson, 2012). According to Clifford (2011), even in hard economic times, the high-end, inconspicuous, and fully priced products sell. The recent economic crisis prompted the affluent population-the top 20% of income earners representing 60% of the market-to refocus on real value and great classics, and to pay the expected price (Kapferer, 2012). Says Max Azria, the fashion designer of BCBGMAXAZRIA, known for dressing top celebrities, "Today we have to be totally crazy and make stuff that stands out," he said. "It takes so much more to get a consumer's attention...