Are Rising Prices a Sign of Health in an Industry?

Photo: Wonderlane

Or do they signify desperation? This is the question that arose earlier this month in Congress, when the House Judiciary Committee again took up the question of creating copyright protection for fashion designs.

We (really, Chris) testified as the sole opponents to the Innovative Design Protection and Piracy Prevention Act, or IDPPPA, which would for the first time in American history provide a short (3 year) copyright for fashion designs, such as the cut and look of a particular dress or suit. To bolster our argument against the IDPPPA, Chris presented data from the Bureau of Labor Statistics that showed that since 1998 apparel prices in the U.S. had dropped or stayed steady—with one exception. At the very top level, prices rose dramatically in this period—by over 200%. The full testimony and graph can be found here.

Clearly more research is needed. But we think this suggests quite strongly that knockoffs are not harming the high-end of the fashion market. Why? Knockoffs are almost always cheaper than originals—often substantially. Were, say, the Forever 21 version of a Marc Jacobs dress truly competing with the original in the market, we would observe price pressure on Marc Jacobs as he tries to capture those consumers who have the means to buy an original but are drawn to a cheaper copy. And over time that pressure would show up in the aggregate price data, especially if the knockoff problem is as pervasive and serious as proponents of the IDPPPA argue.

The members of Congress at the hearing were generally interested in the price data and seemed to agree with our interpretation. But other witnesses challenged us, suggesting that “if you see just the high-end going up like that, it could be interpreted as a sign of producer desperation rather than a sign of health by those designers.”

Are rising prices at the top of the fashion food chain good news for producers—or bad?


Mike B

Thank god someone with an once of sense was on hand to oppose this horrible legislation. If the fashion industry had their way anyone who choose to wear something other than a burlap sack would have to pay out those sky high designer prices. It is clear that removing all knockoffs from the marketplace would only lengthen the amount of time that a dress can stay in fashion and therefore, the time between upgrades so it would be likely that the industry motivation isn't to stop knockoffs, but to simply extract licensing fees from knockoff producers. High end designers want to be able to price discriminate without badge engineering. Sure they could in house the knockoff production, but if anyone ever found out or publicized it these top designers would be ruined. Therefore they want to keep the current fashion cycle intact, but actualize the low end revenue streams as well.

Meesh

Labels like Marc Jacobs aren't the ones who need the copyright law. They are going to sell things no matter what because of their name and the way it makes the customer feel to say "Oh this? Its Marc Jacobs". It's the people just starting out who need the protection. I cant tell you how many times I have seen Urban Outfitters knock off something that came from an up an coming, online jewelry or fashion designer.

Example:
http://blogs.villagevoice.com/runninscared/2011/05/urban_outfitter_2.php

As a designer, it is really nerve racking even going on interviews and showing my portfolio to clients as I, myself have had designs stolen this way. In the end, there is no choice for someone in that situation. There's only so many blogs you can complain on. It's just something you have to suck up and deal with. Because really, who would believe you that the almighty high end designer would steal a design from one person, someone just starting out?! Blasphemy!

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Mike B

Please explain how, as a consumer, you getting more money would benefit me. Right now it seems that I am getting good designs at low low prices from an established brand that I ostensibly trust. Bringing in the lawyers seems only likely to reduce availability and increase costs.

Meesh

I'm not saying it would benefit you. In the long run, the copyright law would barely benefit anyone. Fashion tends to repeat itself; there are barely any ideas left that are truly unique. How can you copyright a design that is essentially something borrowed from the 50's? I'm just speaking for the few people left that are doing something amazing, trying to create a bit of diversity in the marketplace, instead of drowning in the sea of overpriced purses and clothing that gets destroyed within two washes. It's a shame to see people work so hard at something they love to make something of it, just to have their designs and credit being stolen by people, who you apparently trust so much.

Mike B

What I am getting at is if major brands such as Urban Outfitters seem to be able to produce the same designs, for less money with greater market penetration, perhaps independent designers should acknowledge their inability to compete and exit the marketplace. One of two outcomes will result. Either the major brands will suddenly be at a loss for new and innovative designs and thus forced to insource the formerly independent designers they used to "borrow" from or there will be no change in the demand or quality of their products in which case the former independent designers will have been reallocated to more productive uses.

The issue with trust is that a major brand has a certain level of consumer trust, which is the whole purpose of branding. Instead of having to troll the interwebs looking through scores of small time independent designers whose taste and quality can vary wildly, consumers can just go to places like Urban Outfitters that have done the filtering for them. People are lazy and few will ever take the effort to seek out small time designers. This law is simply a mechanism wherein designers who know they cannot compete in the marketplace will be able to make up for it in the courthouse.

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Meesh

What I am saying is that not everyone wants to be Urban Outfitters. Can you believe it that some designers only want to sell their niche and focus on making a quality product instead of a mass produced piece of junk? Can you believe that's how Urban Outfitters started until they became a corporation, started mass production, ran out of ideas, and started STEALING, not borrowing designs? Its true.

Also, you are right, people are lazy, hence online shopping. Their laziness is actually an independent designer's gain . Consumers will absolutely find and buy from small time designers because it is so incredibly easy. They might not be looking directly for the new designers but maybe they are looking specifically for an Asian inspired, gold, lace top that leads them right to the budding designer's site. Fashion has changed and people want to look unique. This isn't the 90's where everyone wanted to wear a Calvin Klein shirt with the logo on it. Online retail sales increase every year and more people prefer to shop online because they can find exactly what they want in just a few clicks, for a price they can agree with.

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robyn ann goldstein

Protection from whom? As far as the eye can see, my not altogether original design was all wrapped up by 1995. Now it is just a matter of making it obvious. The joke's on me? No not altogether or exactly. Freakonomicus. Yes, It has always been on us. So there it is. Now just let me get done with it. Further interruptions I do not need.

As far as one fashion design needing protection, as one friend recently said to me, it soon will have a life of its own. I am moving on. Please do not disturb!

Roger S.

Fashion is not something that designers tap into like a river of clear water. Designers create fashion. To say that "fashion repeats itself" is to wrongly exculpate them. Designers recycle fashions, hence the 20 yr old jeans or heel geometries.

If you want new ideas, just go to Anime Expo or Comic-Con and see what the nice costumes are. I hear that gothic lolita and steampunk are gaining steam. There is no shortage of new ideas, only new ideas that're somehow safe at the same time.

This does not explain avant-garde fashions though, or the people wearing suits made of Shinto priestess hair...

M.M.

That's incorrect, though—steampunk is recycling/remixing Victorian fashions in the same way as traditional fashion designers recycle/remix the previous periods that inspire them ... and musicians recycle/remix the music of eras and countries that inspire them ...

And, a ton of manga/anime is lifted straight from traditional high-end fashion. Much of Ai Yazawa's seemingly innovative punk clothing depicted in Nana is just Vivienne Westwood clothing/jewelry (like Nana's armor ring or Shin's "lighter" necklace.

Mitch Cahn

Rising prices in the fashion industry are necessary to end the race to the bottom that has resulted in sweatshop conditions in most garment factories in Asia and South and Central America.

caleb b

You know, those sweatshop workers aren't taking sweatshop jobs because they're stupid, right? It's because they need the job to feed their families. Would you rather they had no job at all and starved to death?

You do realize that the poor country that inherits a "race to the bottom" factory now gives these people an income they didn't have before, right? It’s a win for that country.

Also, the fashion industry has the incentive to make as much profit as possible. So the people that want to use sweatshops to maximize profits, are already doing so. It doesn’t really matter what current prices are, they’re focused on the cost side.

Jaime

What is wrong with desperation in the first place? Is it not what leads us to innovate further? Has it not brought us great benefits in the past?

Whether it is a sign of desperation or not is irrelevant. Fashion companies need to prove that someone who buys a 3 grand dress for 80 bucks is a lost consumer in the 3 grand/dress market. I find that highly unbelieveble.

Nosybear

In this case, I'd say desperation. The human body has a defined shape, size zero models excepted, and there are only so many ways to drape it. For most of us, who cares about the prices at the high end. I'm not going to pay more for a suit than I paid for my car no matter who designs it or no matter how much exclusivity I have on the cut and fabric.

James

Agreed. And I didn't pay all that much for my car, either :-)

M

Many of the best innovations come from other innovation - that is, emerging ideas will usually have some similarity to other emerging ideas. These similarities are present even when the innovations were developed independently, as innovators usually create in response to many of the same underlying factors, such as existing styles, demographic trends, and economic conditions.

My concern is that copyright protection could cause legal hassles for many new designers. If you want a corralary, look at how often famous authors (e.g. J.K Rowling and her Harry Potter series) and successful inventors get sued by others who have had similar ideas. Would it really help upstart designers if they must get permission from rights holders in order to make their own designs? Do they really want a substantial portion of industry revenues going to the costs of negotiating licenses or to fight out litigation threats?

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HushSec

Good god, talk about flipping a good argument on it's head. There is much more money to be made in learning from the fashion industry and removing copyright, than there is in stifling creativity in the fashion industry by adding copyright!

This whole topic was covered more completely and intelligently than I can manage by Johanna Blakley in her May 2010 TED Talk: 'Lessons from Fashion's Free Culture':

http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture.html