Cheap chic – a recession mega trend?

In a world mired by economic problems supermodel Gisele Bündchen in cheap flip flops made a maker of low-priced sandals really take off. Devote 1 minute to watch Bloomberg TV discuss the success story:

Have actually wondered when something “cheap chic” would become a huge hit and make headlines. The timing is perfect and the concept spot on for today’s world. Let’s face it, consumer spending isn’t what it used to be. A lot of people who used to buy haute couture can no longer afford it. But they still want to look chic and wear the right things.

Price lowered and endorsed by celebrities 

So what’s better than a celebrity endorsement of an affordable product to appeal to people who can no longer have the means for say, Chanel? Add to that lowering the price even more and you have a winner.

And it worked, no other shoemaker in the world has had such a rally. Can’t help thinking of those flip flops as “equality shoes”. They make poor girls feel like supermodels and the ones that lost a lot of money feel they are still buying what’s trendy and chic. “Gisele wears them, darling”. They love being able to afford the same things  their friends who are still mega wealthy buy.

The shoemaker actually made 195 million pairs of sandals last year and the average price was $7. That really shows how concentrating on huge volumes, as opposed to high prices, can be a winner in times like these.

Grendene´shares have doubled the last year. Compare that to the average shoe company that has risen by approximately 23%.

The power of celebrities

Personally had never heard of Grendene before despite the fact that the Brazilian company was founded 1971 and today is a conglomerate with 20,000 employees.

Grendene has been using celebrities such as Claudia Schiffer and Sharon Stone to promote their products for a long time. But despite that, I have never come across the name or any of their adverts before. It’s probably not a coincidence though, since it’s in times like these that their strategy really pays off handsomely. A world mired in deep recession absolutely loves cheap chic. And having Gisele introduce her own line of Grendene plastic sandals in such times is absolutely perfect. A lot of Westerners frown on celebrity endorsements. But it has always worked and always will, especially during hard times.

Have you come across other cheap chic concepts that have become successful recently? Do you agree that looking good for less is a concept bound to become even more popular at the moment, above all in the West, where economic recovery hasn’t yet taken place? Do you think the flip flops, and Grendene, would have been such a hit if it had produced expensive shoes? Or would they have succeeded without Gisele and Shakira? Are we bound to see more cheap chic success stories coming up?

Video: Bloomberg – You Tube


35 thoughts on “Cheap chic – a recession mega trend?

  1. I don't personally tend to follow celebrity endorsement, although I don't have a problem with them! And finding products that are affordable and make women feel better about themselves is a great idea! But I do believe that price and quality should have middle ground. Cheap often means cheap material and/or cheap labor, and to me that more often than not isn't worth the cheap price! Always a trade off, and something worth considering! Thanks for the post!
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    1. Glad you agree that cheap chic is a good idea to make women feel better about themselves. Presumably you agree that it's great in the economic downturn we are going through? Labor is cheap in Brazil so the fact that it's a Brazilian company manufacturing the flip flops means that they are paid less than they would be in the West. But the cost of living is also lower. They would not be paid more if the shoes were expensive.

  2. One concern I have sometimes is how stores can sell clothes/shoes/accessories as cheaply as they do. Are workers in some developing country being seriously exploited for H&M to be able to charge a pittance for their clothing? Having said that, assuming they're not using slave labor, why not use super models if that helps sell cheap chic?
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    1. We are in this case talking about a Brazilian company so they are no doubt paying salaries that are applicable to Brazil. Needless to say they are lower than in the West. But so is the cost of living. Using slave labour is horrendous but I would be very surprised if that's the case with this particular company.

  3. Personally, I'm turned off by celebrity endorsements but if they have to endorse something, I definitely prefer it to be clothing, makeup or some other tangible item. It's when they endorse political candidates that I want to jump out of my seat and shout "Who cares what you think!" at the TV set.
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  4. "If the shoe fits, wear it" – ? My first reaction is about the fabric of the shoe – will it create foot problems? Oh, dear, I guess I'm boring when it comes to fashion. I want it to be a good, healthy fit first, fashionable a distant second. I'm more likely to buy a shoe because a friend recommends than if a fashion model says it's sexy. But obviously there is a market for this sort of thing – fine with me for the businesses who sell them.
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  5. Your post reminded me when Stella McCartney started designing clothes years ago for Target (I think). I believe it was successful and it concept can apply to clothes and footwear etc. For years many big name designers used to have warehouse sales wear you could buy designer clothes for a fraction of the price and the sales were always popular. Like most things in life I think it depends as to what it applies to.
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  6. I've always been a big fan of stylish clothes and enjoy having a good variety of things to choose from, so I can appreciate the appeal of getting fashionable or trendy items at a good price. I imagine that coupled with the celebrity endorsed low end items or designer low end we will also see the rise in popularity of high end second hand stores. They are certainly popping up in my part of the world and they offer high quality designer labels at affordable prices. I recognize that some people find the concept of second hand unappealing, but from an environmental perspective it makes sense and based their persistent emergence, it seems many more are keen to dress with quality, style and affordability. Great article and thought provoking.

  7. The high-end designers who seem to create fashions for runways and the publicity and not for people to wear, are really making their money in their ready-to-wear collections in department stores. Also, it's become "chic" to dress downscale. So the ad campaign with Gisele Bundchen doesn't surprise me. It was a shrewd move on the part of the manufacturer.
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  8. I think we are definitely bound to see more cheap chic success stories. I know personally for me, as somebody that enjoys nice things, I also enjoy saving money and concepts such as this are great. You made a really great point about these types of products being great for women who are used to buying more expensive fashionable items, but no longer can because of the economy.
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  9. It is a fabulous concept. Allowing everyone to feel good about themselves without spending a fortune works for me.
    As you note, it is perfect for the times we live in.
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  10. I love that a lot of designers are actually creating clothing lines for different affordable stores like Target and Khol's. Making nice clothes more affordable is showing people that they don't have to pay a ton of money to look good. I also really like that Princess Kate has been seen re-wearing different pieces as well as wearing clothes from affordable brands and online retailers. What a great and realistic style icon she is!
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  11. I think it's great that major retailers such as Target and previously K-mart have tried to up their fashion ante by bringing in reasonably priced celebrity endorsed fashions and accessories. Who says you have to spend a lot of $$ to look good!
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  12. I'm not really a designer type of person, but I do suppose Target's promotion of products by various designers is as close as I'll ever come to this trend. While I would never spend a ton of money on anything over than a car or a house, I believe in making practical choices. Chances are those $7 flip flops won't last more than six months, but I guess that's great for consumers who like to change their look all the time. Me? I'd rather buy a higher quality product that will last a decent amount of time, especially since shopping is not my favorite thing either.
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  13. I believe it's about time. It's very hard to justify spending the amount of your home mortgage on a dress. I have generally been a bit more frugal then my counterparts when it comes to fashion. I have always looked for a great look at the very inexpensive price. It's always been there, it's just now become the fashionable thing to do… LOL.
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  14. There's definitely a trend towards less conspicuous consumerism – whereas 10 years ago it was good to flaunt your wealth, today it's increasingly frowned upon, so this is certainly a driver of "cheap chic," particularly in the developed world, where many people are a lot worse off than they were.

    However, there is still a huge number of very wealthy people, and the number is growing strongly in emerging markets such as the BRICs – this is ensuring some of the top labels continue to grow, even in these tough times.

  15. Well if it is not purposeful, it should be given the results reported on here. Not just for clothing but I bet it would work for other products.

  16. I think "cheap chic" is great. I love when Target has their designer series…some of the stuff is really great. Designers use it to connect to a whole new audience. Recently Target partnered with Nieman Marcus for a series and a lot of the merchandise sold out so fast online and in stores.
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  17. I think something like this is perfect for the times. People can look great, like a super model, and still have money to eat dinner. I have never been one much for fashion in this way, but if I can look good wearing a 'name' brand then it makes sense. More companies should pay attention to this tactic.
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  18. The number of haute couture clients has dwindled not (or not only) because of prices but because a lot of the dresses presented on catwalks is just unwearable by those who can afford it.

    1. That applies to some wealthy women, Michael. However, many women who could afford haute couture had clothes designed especially for them. But let's not forget all of those who have lost their money in the economic downturn?:-)

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