Fashion Trends and Direct Benefits
In class, we talked about network effects in direct benefit cascades. In order for a product to be successful, it has to pass a certain “tipping point,” after which it will reach an equilibrium between the number of people who are expected to buy the product and the number of people who actually do buy the product. Otherwise the product will fail. This idea draws parallels to the fashion industry, as is explained in this post on the blog Aesthetics + Economics, titled Fashion Trends + Diffusion Theory.
Link: http://aestheticspluseconomics.typepad.com/aesthetics_economics/2006/05/fashion_trends_.html
In the blog post, the author talks about Everett Roger’s diffusion theory and how it relates to the popularity of fashion trends. The theory postulates that there are five phases in the diffusion of an innovation, in which different populations adopt the idea – these are the innovators, the early adapters, the early majority, the late majority, and the laggards. Using the example of cowboy boots, a popular trend in the mid-2000s, the author argues that the trend first began to gain popularity when it appeared in Paris Vogue, after which the early adopters and early majority started to wear them. Somewhere in the early majority phase, department stores like Nordstrom started to sell them, signifying that cowboy boots had reached their tipping point. Eventually the trend reached “saturation.” She also argues that just before the tipping point, celebrities such as Lindsay Lohan, Nicole Richie, and Mischa Barton were seen wearing the trend, which was critical in the boots’ success – in Malcolm Gladwell’s The Tipping Point, these people are called “connectors.” She then goes on to talk about oxford shoes for women, a trend which at the time the article was written was still in the early adopter stage. She predicts that since Kate Moss and Mary Kate Olson were recently seen wearing the shoe, the trend would soon reach its tipping point and enter the majority. We can now say that she was right, as oxford shoes are a very popular trend among women today.
Adopting a fashion trend can be seen as having a direct benefit because the more people who are adopting it, the more likely it is that you’ll look trendy wearing it. (This becomes less true as the trend saturates because it starts to become passé, but the model holds at least for the beginning.) The model in the blog post also matches the model we talked about it class very well. The innovator and early adopter phases of a fashion trend happen until the trend reaches its tipping point. The trend is often helped out by celebrities, who draw similarities to the “authorities” that we talked about in relation to web searches – these people are connected to millions of other people by virtue of their being famous, and people look to them for fashion tips. The tipping point is reached when the trend starts to be mass marketed to average consumers, and eventually an equilibrium is reached where a large amount of the population wears the trend – the product is now saturated. One interesting thing to note is that fashion trends usually fall out of style after some time, a process which happens with many other types of products and which was not modeled in class.