How Obama Moves Markets (But Not the Obama You Think)

Barack Obama may be under fire for failing to jump-start the economy, but a feature in the Harvard Business Review points out that Michelle Obama is doing her part to rejuvenate the fashion industry – at least the part of the fashion industry she likes. Recent research by David Yermack indicates that the First Lady has the power to move fashion markets just by wearing an article of clothing. Yermack says that Obama has generated $2.7 billion in “cumulative abnormal returns” for the brands she wore. All in all, a Michelle Obama fashion portfolio would have been a very good bet for investors:?”For 18 major appearances, the abnormal returns were 2.3%. Compare that to a 0.5% average gain when a company announces a new celebrity endorser. For one European tour, an index made up of stocks associated with her wardrobe gained 16.3%, trouncing the S+P 500’s 6.1% gain in the same period.” [%comments]


MonicaCMS

Michelle Obama wears clothes mostly from up coming designers. As soon as she wears them, they become worldly known. This is a very valuable piece of information for entrepreneurs. The First Lady is not only being watched by the media at all times, but is also a role model to many. If I designed clothes or any other common product, I'd send Mrs. Obama my products for her to wear. If people start seeing that she uses them, they would want to use it too. This will create a high demand for my good, and also, an increase in price. Not only will the designer be creating a high reputation, but also it will forever be recognized as one who designed for the First Lady. Moreover, not many people can afford to pay the high prices of the products Mrs. Obama tends to wear, and so if I were a more economic store, for example Gap, I'd feature clothing that resembles hers. If I were Jason Wu, I'd be thanking the First Lady for all profits made in the past year.

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JaimeCMS

The biggest and most important companies in the factory industry always use sexy popular models, movie stars and even political figures to use their clothing line. Michelle Obama is a perfect candidate for this. Not only is she the First Lady of the first black President in the whole United States history, but she is also an important political figure that many people admire. These clothing designers want an increase in the demand of their product. Their smart economic team in their company knows that if they get people like Michelle Obama to use their clothing line people will recognize it and start to use their brand. Using Michelle Obama also changes the consumer tastes on this product which increases demand. In my opinion, this technique that prestigious clothing designers are using to get people to buy their products is a very smart move.

WilfredoCMS

The first lady of the United States is always a fashion icon for many. It isn't the first time that a first lady moves the fashion industry, Jacqueline Kennedy for example also moved the fashion industry. Michelle Obama is known for using new upcoming designers and also using brands that are accessible to everyone, not always she uses expensive gowns or dresses and thats why Americans are always looking what she is wearing. People know that the Mrs. Obama doesnt get paid to wear what she wears so people know that she truly likes what she is wearing, and not like most famous Hollywood actresses that get paid to wear the brand they are wearing. Many designers in order to get more upcoming costumers and buyers send Mrs. Obama their cloth because they know that people will watch her and see what she is wearing at an event and this will automatically attract customers. The Fashion Market is moved by people who set trends just like Michelle Obama and designers by sending her their cloth make a good decision because their cloth will be seen on a fashion icon such as Mrs. Obama and people will want what she is wearing and no matter the cost they will buy it , but their is a difference on Mrs. Obama that I mentioned before and that is that she doesnt always wear expensive brands, she wears things that most americans are able to buy, so thats why she is a fashion icon followed by many people.

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Drill-Baby-Drill Drill Team

I think a particular playful T-shirt design would really turn heads and light up sales.

M. Obama should wear the T-Shirt that says:
" I 'm with Stupid. ----> "

Just because we are in a Great Recession, doesn't mean laughter is banned. Hey in that Scenario, I'd buy that shirt.

JoseACMS

I find it interesting how the first lady can have such an effect in the fashion market. There are tons of models and actresses that daily use fashionable clothing lines and at the end of the day, they certainly do have an effect on the fashion market. However, there is only one first lady of the United States and anything that she wears is much more looked upon than what other celebrities wear. It clearly makes sense why brands and clothing designers would love to have Michelle Obama wear their clothing. The product she wears will cause the consumer tastes for this product to alter in a way that would increase demand. Needless to say, this would also allow the the clothing companies to increase their price because everybody will want to buy what the first lady is wearing and they will be willing to pay more money for the clothing no matter what.

It would be interesting if Barack Obama could have such an impact on a more crucial part of the economy. Perhaps he is affecting a more hidden market that we still don't know about.

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keylaCMS

Of course she would have this power, she is what we call a trendsetter. She is the first lady and is supposed to represent all of the positive qualities a person should posses. Even though what she wears might not be as appealing as other clothes or jewelry, people will still buy things similar to what she owns. This is because we always like what we see a lot. She appears on TV and newspapers all the time, meaning that we see and hear about her a lot on a daily basis. The fact that she is creating this fashion movement is very good for those designers that provide some of their clothes to her or that she buy's clothes from. Even though you might have designed a dress that not many people are buying (maybe its not that pretty), if Michelle Obama wears it becomes pretty all of a sudden and more and more people will be coming to your store asking you for that dress, hence the demand for your clothes will go up. The more important the person wearing the dress is, the better the dress becomes. Designers know that they have to choose the best people to advertise their clothes, celebrities and political figures, for example. They know how the human brain works and that these people set the trends, the do's and the don't's of fashion (what is "in") So, designers and clothing stores are being very smart in doing this with Michelle Obama, since they know that she is a very important figure in today's society and that she will probably raise people's demands for their clothes. She is a role model to many people and this leads people to want to act or be the way she is.

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kevin

@keyla... I find this statement very interesting:

"She is the first lady and is supposed to represent all of the positive qualities a person should posses."

In general, I don't like the concept of a "first lady." It implies that there is some sort of official role, which there is not.

And I certainly don't think there are any qualities she's supposed to be representing.

As far as the fashion goes - this is shocking! When a famous person wears something it increases demand? And the company who sells it makes money? Marketers all over the world will be happy to learn this well kept secret.

brent

Buying a piece of clothing solely because a famous person did means you are shallow and pathetic.

Get a real life.

MunirCMS

Michelle Obama has proven to be a fashion icon. This is very valuable and important information for entrepeuners and fashion desginers. When she wears something, people around the world are more willing and able to pay for clothe Michelle Obama wears. This creates a big demand for the fashion designers who give clothe to Michelle so she can wear it. This also proves that when Michelle wears a certain brand of clothe, it becomes less elastic because more people, who at first didn't buy it because it was too expensive, now buy it because Michelle Obama is wearing it and this means it is beautiful and popular. She is definitely rejuvanating the fashion industry.