Archive for November 2011
Can Perfect Information Be Applied To Fashion Shopping?
November 21, 2011 | 
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When thinking through a potential purchase, the only sure fire way of knowing if you are getting a good product at the best price is through having complete knowledge of the entire market. In Game Theory and Economics, the concept of having complete knowledge about the environment is called ‘Perfect Information’.
As with all theoretical concepts, actually putting Perfect Information into practice is incredibly difficult, perhaps even impossible, to achieve a complete implementation. There are endless reasons why this is the case. Before the rise of the popularity of the web, practicality was a big factor. Shopping would usually be done in the town you lived in or through mail order. It would be hard to find everywhere in the town that sold what was being looked for and shopping around for the best price would take hours, even days. The web changed this; it made it possible to browse through potentially hundreds of suppliers and merchants and quickly compare amongst them.
Even with the power of the internet, Perfect Information is still not a real possibility in the truest sense. The vast quantity of places that you can buy from is quite prohibitive to thorough research. The biggest obstacle, however, is perhaps the manufacturers of the products themselves. Perfect Information is of great benefit to the end user and purchaser of a product, but is undesirable for the manufacturers and the retailers. Armed with complete knowledge of the market, the consumer will know exactly where to go and what to buy to get the best deal. This invariably leads to retailers and manufacturers having to engage in a price war to be able to remain competitive. Price wars are already commonplace in high-volume, low-value markets such as food and school clothing. Price wars give an immediate advantage to the customer as they pay less for their goods, but over a longer period of time they result in lower standards of customer service and product quality and may also lead to several organizations going out of business. It is for this reason that manufacturers and retailers are keen to avoid price war and why so many manufacturers of high-value products are very strict about the prices and the imagery used by the retailers that sell their products.
One of the best examples of products that have very tight restrictions on pricing and brand imagery is the fashion and designer clothing industry. Many big name fashion brands have spent decades fine tuning their products’ places in the market with aggressive marketing tactics to ensure they retain complete control over how retailers sell their clothing. To the retailers, this means that for certain brands they have almost no flexibility in the prices at which they can sell their inventories to customers. To the customer, this means that wherever they go to shop around for the best deal for a fashion purchase, they will rarely find anywhere with significantly different prices.
Instead of competing on price, retailers have had to find different ways of attracting customers. The most common method is in the level of customer service they provide and how far they are willing to go to ensure that every sale results in a happy customer. Other methods include ensuring that the styles of clothing on offer are different from other retailers. For big name brands like Levi’s or Wrangler, this is perhaps the most common way of differentiating between retailers. Giant brands like these tend to have lots of styles each season, far too many for a single retailer to stock all of them. There is also the retailers’ usage of regular promotions and coupons that are kept in circulation. Coupons are very rare in the fashion world but they do exist, although they are often only available against certain stock and for very limited times.
Despite all of this, customers can still get a good deal by shopping around on the internet. However, they first need to rethink what it means to ‘shop around’ in the modern marketplace. It is unproductive to browse between individual merchants’ websites hoping the right product at the right price.
Now, there are websites that exist that allow you to almost automate the shopping experience. They keep an aggregate index of each merchant, along with every brand and product that they sell. This way, a customer can search for what they want as they usually would but the results they get back will be from every possible match. For example, if a customer is looking for Levi’s jeans, they simply go to a fashion aggregate and click on the Levi’s section. They will then be shown the jeans that are in stock at every merchant on the site. The customer can then sort through the results by price or by merchant to find a product they would be happy with. Once they have made a selection, they are offered a direct link to where it can be purchased from. Some of the more advanced aggregation services also keep profiles of each merchant and brand so the customer can see if there are any offers, sales or coupon codes available or to read reviews that other users have left about merchants.
In summary, while a complete implementation of Perfect Information is not really possible in the fashion and designer clothing market, there is a viable alternative. Fashion aggregation websites enable the customer to make an informed decision on their special clothing purchases without wasting their time searching every retailer individually. They can also be confident that they are buying from a trustworthy merchant by reading about other customers’ experiences with them. The convenience offered by a well-designed fashion aggregator is not quite the consumer utopia of Perfect Information, but is a very close second.
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Online Pawn Shops
As our nation’s economy has been declining and struggling to recover for nearly a decade, the finance industry has changed with the times. Payday lending and other short-term financing services are now mainstream funding options for many Americans. Despite the predatory practices and unreasonable interest rates, alternative funding sources are beginning to become the norm – including pawn brokers. Pawning personal items for quick cash is now so common that reality shows like Hardcore Pawn and Pawn Stars and even documentaries like Broke. The Documentary are emerging as slice of life evidence that America’s economy is evolving in the 21st Century. However, all pawn brokers are not ruthless capitalists who prey on the poor, and not all pawn shops are created equal.
Combating the image of shady dealers and miserly lending associated with local pawn brokers, online pawn shops seek to attract upscale clientele who have hit hard times. Offering larger loans (up to $1 million) and the discretion of electronic transaction, online pawn shops seek to change the image of pawn brokerage and offer short-term financing to a market that has the ability to repay or at least valuables that can be resold for sizable profits. Attempting to appeal to a middle-class market that is largely new to the need for such short-term financing options, the best in the business have created a new look and feel to pawn brokerage that could change the way brick-and-mortar pawn shops brand themselves in the future.
The leader of the pack in the online pawn brokerage industry is Pawngo, a company that targets the affluent (or once affluent) who are experiencing financial hardship and have luxury items to use as collateral for short-term loans. From Louis Vuitton bags to Cartier watches to Picasso paintings, valuable personal assets are pawned via the internet, allowing patrons who may be reluctant to visit local pawn shops the opportunity to get the cash they need with the discretion they desire. Typical loans from Pawngo average roughly $1,700, 17 times the $100 pawn-industry average. (1)
Another major benefit to using online pawn shops for short-term financing is that pawn brokers do not report to credit bureaus. If you default on your loan, you simply lose your collateral. So, borrowers who are protective of their credit ratings can use this funding option to achieve their goals without fear of digging themselves deeper into financial ruin.
While online pawning is attractive for a number of reasons, the loans themselves are still non-traditional, and bring with them exorbitant interest rates. At Pawngo, for example, terms are for three to six months, at a maximum of 6 percent interest, but that interest is accrued every month. So, if you keep a $2,500 loan for three months, the interest due is $150 per month, totaling $450 in interest, with the annual percentage rates ranging from 48 to 84 percent, depending on the loan amount. (1, 2) Loan extensions make this figure jump even higher. The loans are still pawn shop quality, just without the social stigma of being spotted hocking the family jewels on the wrong side of town. However, with all things considered, online pawn shops can provide very comfortable loan options and positive pawn experiences for qualified borrowers who need cash fast without risking their credit score or their reputation.
(1) http://www.smartmoney.com/borrow/debt-strategies/pawnshops-go-upscale-and-online-1304613626407/
(2) http://bucks.blogs.nytimes.com/2011/06/30/an-online-pawn-shop-that-seeks-to-go-upscale/
American Made T-Shirts – How to Support Anti-Sweatshop Production
There are many companies located in the United States that are beginning to manufacture t-shirts made from all natural products in keeping with going ‘green’. The purchase of t-shirts and clothing made in other countries is also an issue now with ‘sweatshops’ being used for cheap labor. There are many reasons for only purchasing American made t-shirts.
Tips for Finding American Made Products
If you want to be sure the products you are purchasing are not produced in sweatshops by workers, who are being exploited, buy USA made t-shirts. Countries overseas that are paying workers very little, denying them the basic rights of humane treatment and seeking reprisal for those who do not conform are not something that should be supported.
Shoppers are often unaware of the origin of the clothes they purchase. All they know is they go to the store, see something they like and make a purchase. If they knew what was really behind the manufacture of the clothing they may change their minds about buying these items.
American made t-shirts may be found by adhering to several tips that will ensure the clothing you are purchasing is not made in a sweat shop. One of the ways of finding USA made t-shirts is to look for clothing made under the Fair Trade system. This means the items you are buying are made by workers who are treated fairly. They are paid an honest wage and are guaranteed breaks and sick leave instead of being treated badly. Workers who are in the Fair Trade system are usually economically disadvantaged so this will be helping them to support themselves and their families.
The UNITE HERE label is another way to find American made t-shirts that are not made in sweatshops. This is a union that was created when the Union of Needletrades, Industrial and Textile Employees and Hotel and Restaurant Employees International Union merged. USA made t-shirts purchased with a Union label is a guarantee that the workers who made your t-shirt are treated fairly. They have a contract with the company they work for that ensures safe and fair working conditions as well as the wages they are being paid and benefits.
Check on the companies that make clothing. You can find cooperatives in the U.S. that are a very good organization to support. American made t-shirts made by cooperatives may be another source of t-shirts made from all natural materials. By helping to protect the environment you are also helping low-income employees to support themselves. The co-ops are often formed by individuals who have an ownership in the company. This allows them to have a steady income and good working conditions. The products made are of a good quality because they take pride in the manufacturing process of a company they own.
If you have a favorite store where you purchase your clothing, you can check them out and see if they have poor labor habits. Are the t-shirts you are purchasing American made t-shirts or is your favorite store using sweatshops for the clothing they bring to you? The Responsible Shopper Website is one way of finding out if the USA made t-shirts are really made in the USA. The company’s profile will have any accusations made against them and information about whether they are lined to abusive sweatshops.
It is hard today to make sure the clothing you are buying is made without the use of labor practices that are unfair to others. We should be concerned with the clothes we wear naturally because we want to look our best. Emphasis is on wearing name brand clothing and if American made t-shirts have the brand, this is all well and good. But if the brand you like is being made by children who are being mistreated and made to sit for hours without breaks, is wearing that brand worth it? Do some investigative work about the brands you like. By taking a stand you can help to stop these unfair practices.