Bang For the Buck
“Most women’s magazines simply try to mold women into bigger and better consumers.” ~ Gloria Steinem
Contrary to what a few people have been asking me in regards to my comments on the state of shoe prices in SL, I am a believer in free market principles. I understand and respect the desire of content creators to get the most they can for their wares the same way I understand that as a consumer it’s my responsibility to educate myself and structure my own choices in regards to purchase. I do not (except in cases like monopoly, insider-trading, price gouging in times of panic, and other shady ethics situations) draw any moral line based on pricing in RL or SL. The objections I previously stated are in regards to my own standards of market expectation and what I feel to be common sense from a consumer standpoint and are not intended to bring into question the validity or ethics of those I mentioned. Opening debate about common sense is not the same as questioning integrity and that bears stating up front and often.
So, where am I coming from in my pricing objections regarding the SL shoe market?
To fully understand my position (this is going to be one of those annoyingly long posts), we have to look at the overall fashion market in SL from a historical standpoint. I’m going to use 2006 as my baseline for a few reasons — not the least of which is that it serves as the best reference for me in both personal recollection and easy-to-grab reference. There are, however, myriad other important reasons to use 2006 as a baseline which include:
1. The designer market finally had enough players to be considered more than just a handful of creators putting out random content;
2. Many average prices for popular items came to be established;
3. High-end market items began to emerge amid average products;
4. A major innovation was introduced (flex prims) giving us an example of how the need for creators to “skill up” can affect the market;
5. Standard packaging for many items was established.
What’s going to make this challenging is understanding how these changes translated to RL value for consumers given that the Linden Dollar fluctuated so much more in 2006 than it has in 2009. While I can hold my own in most pre-calc math, I’m a word girl, not a numbers girl. It’s possible I’m going to screw up in some of this when I get down into the “what this translates to in RL numbers” part of this post, so please, check my history and math and I’ll update as needed.
First, let’s look at pre-2006 SL fashion facts for a moment:
1. There were a handful of good designers on the grid, few of which had established brands or lines. Stand-out stores like Celestial Studios and Mischief were guaranteed major shares of the market;
2. A vast majority of items were sold randomly alongside other items (it was not unusual to have a pair of jeans being sold alongside a fountain and a prefab, etc);
3. “The good stuff” was overwhelmingly photosourced (and likely in violation of any manner of copyright standards);
4. All-color packs were the norm as opposed to single-color sales. If you bought one, you bought them all. One of the mains reasons for this I often heard from creators at the time was they wanted *all* their stuff to be out on the market, not just the black, taupe, and red options (the majority of single-color sales).
In 2006, the above situation began to evolve and the SL fashion market really started to gel. You had more sophisticated original designs popping up, you had people starting to brand themselves and their wares effectively, and the realization that there was actually RL profit to be made generated an interest and motivation for creators to take pride and put more effort and creativity into their products. Packaging norms emerged like the segregation of single-color items for most fashion products, with higher priced color packs as an option for shopping whores like me and Willow. Buying a dress in single colors is something consumers take for granted today and obviously that barn door is way beyond closing, but I still have serious misgivings about this aspect of the market. It’s both good and bad for consumers (more choice, less value) and I’m not convinced it’s the best option for sellers for reasons too complicated to add to what is already going to be a complex post. Suffice to say, 2006 was the year that put SL fashion on the map, and understanding where things started helps shed light upon how we got to where we are.
For our purposes, the most important thing about 2006 is that the following prices and sales options began to emerge as the norms:
SL FASHION PRICE NORMS FOR 2006
Skins
Below Market Quality Skin, Single Option: L$250 - L$500
Market Quality Skin, Single Option: L$1000 - L$1500
Outliers/Notes: The oddity in this range were the RaC skins that ridiculously sold for L$3000 - L$4000 a pop.
Hair
Single Color, Single Style: L$100 - L$150
Color Pack (generally 3-5 colors), Single Style: L$200 - L$300
All-Color Pack, Single Style: L$750 - L$1500 depending on amount of colors offered
Outliers/Notes: This became the norm for places like ETD, HCT, Empyrean Emporium, Tami McCoy, etc. There were oddities, like Lash who sold everything in all-color packs for L$300, but the industry standards were largely taking root.
Clothes
À la Carte Items: L$50 - L$200
Average Outfit/Costume: L$200 - L$300
Average Formal / Dress Gown: L$500 - L$750
High-End Gown/Bridal/Designer: L$1000
Outliers/Notes: Only Ceres Prototype and Nonna Hedges sold the bulk of their inventory lines (which were small) for the L$1000 range. Mostly you had designers who included the bulk of their wares in the average ranges with a handful of special items in the high-end category.
Jewelry
Average Pieces: $50 - L$200 (piercings, pair of earrings, necklace or a bracelet)
Average Sets: L$300 (earrings + necklace and/or bracelet)
High-End Items/Sets: L$300 - L$500
High-End Wedding Sets: L$750 - L$1000
Outliers/Notes: I only remember creators like Shiny Things, Lassitude & Ennui, Elexor, and Miriel offering a handful of high-end merchandise items, most of which fell into the under L$500 range even for sets. The only items I recall being in the L$1000+ range at all were the Scheherezade sets from Shiny Things (L$1300 necklace and bracelet, unlimited run) and Elexor’s Limited Edition Alternating Chanel and Square diamond set (L$2500 necklace and bracelet, run of 50).
Shoes
Average All-Color Pack: L$99 - L$250 (no-name or small line designers)
Individual Above-Average Pair: L$100 - L$250 (Celestial Studios, etc)
Individual High-End Pair: L$200 - L$350 (Prim Seduction, L&I, Shiny Things, Jeepers Creepers)
Ceiling High-End Pair: L$400 - L$500 (Shiny Things)
Outliers/Notes: Although most aspects of SL fashion can be broken into market-quality or high-end options/designers, shoes had three very distinct levels that I’m labeling average, above-average and high-end. This is partially attributable to the fact that system-based shoes were still a valid purchase and the invisiprim/size-zero attachment norm hadn’t been completely established until the later part of 2006. We also have to take into account that Fally was so far ahead of the rest of the market that its hard to know how to classify her for 2006. Fally makes the spectrum of quality in 2006 far more skewed than it is in 2009.
So, how do these trends and numbers hold up in today’s market, years later?
SL FASHION MARKET PRICE COMPARISON 2006 VS. 2009
2009 Skins. You still get market quality skins in the L$1000 to L$1500 average range. The main difference from 2006 is that now you can get near market quality skins for free as well, so the below-market quality end of the spectrum pretty much disappeared. This remains one of the highest drama items in SL (largely due to copyright violation issues) and yet, the market price has been fairly stable since 2006, even while the quality improved dramatically and the number of creators offering skins exploded.
2009 Hair. For the most part, still within range of the same pricing with color packs in single styles making up the majority of sales. In 2006 those prices were L$250 - L$300 and that’s maybe ticked up a notch to L$250 - L$350, but for the most part we’re still about the same. Worth noting is the fact that hair is likely the most-purchased genre in SL fashion and the voracious consumer capacity of the market may lend to its relative pricing stability.
2009 Clothing. Harder to peg because clothing covers such a range of options, but overall prices hover in the same ranges as they did in 2006, with the obvious difference being that there’s simply more high-end merchandise out there. But then there’s more of everything out there. I’m going to bump the high-end average designer/bridal to L$1500 in 2009 up from L$1000 in 2006 because there’s enough high-end designer wear to justify the bump in averages. It’s worth noting that these market prices have remained mostly stable, but the consumer lost the option of resale value (or alt trade-off value) for high-end clothing with the emergence of copy/no-trans becoming standard for nearly all clothing.
2009 Jewelry. Tricky, but I have to say things are still within the same ranges as 2009.
2009 Shoes. Here we come to the crux of what I see as a shoe pricing anomaly. First, we have to recognize that all-color packs and no-name designers pretty much disappeared as creators began including their slightly-below-average shoes with outfits instead of offering them as individual sale items. Next, we have to accept the morphing of above-average single pairs into high-end average pairs. In 2006 above-average and high-end average single pairs ranged together from L$100 to L$350. In 2009 you were lucky to find anything of market quality under L$300, but it’s fair to say that the average cost ranged from L$350 - L$500 with the high-end market going into the L$1000 - L$2000 range: double to quadruple where the market was in 2006.
What does this translate to in RL value of what an SL fashion junkie could expect to pay then vs now?
USD/L$ CONSUMER VALUE COMPARISONS 2006 VS 2009
First, we need to understand that the SL exchange rate has remained relatively stable in 2009, lingering in the 262:1 area, which I’ll use for the purposes of the below comparisons. In contrast, the 2006 exchange rates fluctuated from 275:1 to 340:1 depending on the time of year. I’ll be using those numbers in the comparisons below. Again, I’m not an economist, but I feel that establishing these numbers for comparison give a fair overall view of the market. Next we need to keep in mind the state of the world economy in 2009. While it looks like most of these numbers are lingering in the same general areas, the luxury cost they represent to the average consumer should be taken into account for a year that saw most consumers having to make tighter choices in their casual spending habits. Finally, take into account that in the clothing category, consumers also lost resale value of high-end designer merchandise as the no-trans evolution took hold.
2006 Exchange Rates: 275:1 / 340:1
2009 Exchange Rates: 262:1
(All rates L$:USD)
Skins
L$1250 Skin in 2006: $4.55 USD / $3.68 USD
L$1250 Skin in 2009: $4.77 USD
Hair
L$300 Color Pack in 2006: $1.10 USD / $.88 USD
L$350 Color Pack in 2009: $1.34 USD
Clothes
L$150 À la Carte Items in 2006: $.55 USD / $.45 USD
L$150 À la Carte Items in 2009: $.57 USD
L$300 Outfit/Dress in 2006: $1.10 USD / $.88 USD
L$300 Outfit/Dress in 2009: $1.15 USD
L$500 Formal in 2006: $1.82 USD / $1.47 USD
L$500 Formal in 2009: $1.91 USD
L$1000 High-End Designer Gown in 2006: $3.64 USD / $2.95 USD
L$1500 High-End Designer Gown in 2009: $5.73 USD
Jewelry
L$300 Average Set in 2006: $1.10 USD / $.88 USD
L$300 Average Set in 2009: $1.15 USD
L$500 High-End Set in 2006: $1.82 USD / $1.47 USD
L$500 High-End Set in 2009: $1.91 USD
Shoes
L$250 Above-Average Pair in 2006: $.91 USD / $.74 USD
L$400 Market-Quality Pair in 2009: $1.53 USD
L$350 Individual High-End Pair in 2006: $1.27 USD / $1.03
L$500 Individual High-End Pair in 2009: $1.91
L$500 Ceiling High-End Pair in 2006: $1.82 USD / $1.47 USD
L$1500 Ceiling High-End Pair in 2009: $5.73
CONCLUSIONS BASED ON DATA
1. On average for categories of hair, skin, and jewelry, consumers lost only a few cents in value for their average expected purchase, with a maximum swing of $.25 to for skins. During the L$ value crash, consumers saw bigger values of up to $1 per purchase.
2. Market-quality clothing saw much the same changes as hair, skin, and jewelry with value differences lingering mostly in the ten-cent and under range. During the L$ value crash, consumers saw more modest values of up to $.50 per purchase.
3. High-end designer clothing saw a larger drop in consumer value with the difference in average purchase hitting in the $1.90 area. During the L$ value crash, consumers enjoyed values of up to $1.80 per purchase.
4. Shoes saw the most dramatic shift in SL fashion market trends with the average value shifting $.40+ for market-quality wares $.70+ for high-end products. During the L$ value crash, consumers saw values of up to $.80 per purchase.
5. High-end designer shoes branched into a staggering change in per-purchase value cost to the consumer with a $3.90 average for the high-ceiling items. There isn’t a real comparison for what 2006 consumers had available during the L$ value crash, so it’s not fair to say this part of the market ever had a vast consumer-benefit-swing.
While most (if not all) aspects of SL fashion have remained relatively stable in price since 2006 (or saw drops in L$ exchange values that benefited the consumer), shoes are boldly out of proportion. The question becomes: why?
These possibilities have been suggested to me:
A. Quality improvement. While I do acknowledge that the overall quality of shoes is much improved from 2006, the fact is that the real jump in innovation on shoes happened in 2006 with the standardization of prim shoes at size zero and the influence of Shiny Things as the high water mark. If you look at most shoes from 2006 they obviously dated, where Fally’s 2006 designs could still pass in the 2009 market as near or at market quality. Shoes have not improved significantly more than any other genre of fashion item, respectively.
B. Introduction of Sculpt Prims and Associated Scripting Costs. Flex- and sculpt-prims have affected the clothing and hair markets no less significantly than they have shoes. When J’s introduced their prim toe shoes they were (and still are) within modest market norms. The introduction of sculpted toe shoes can be likened to any number of new trends in attachment hair and clothing. Yes, there are significant investments in elements like scripting for tinting and resizing, but scripting has always been a factor in the fashion market and resize scripts are becoming as much the norm for skirts, hair, and jewelry as they are for shoes. Scripting is also a partially self-inflicted cost as shoes (like jewelry) have enjoyed a no-mod status for years and offering resizing scripts is more for creator convenience to avoid the need to do custom fittings for consumers. Most of these types of recolor and resize scripts also sell on the market for a fair price to content creators. There’s no reason sculpties or the scripting they require presents a greater burden on shoes than any other genre in the market.
C. Stripper Mentality and Brand Whoring. Maybe I’m out of touch with the average SL consumer, but I can’t believe this is the majority state of the fashion consumer market in SL. Yes, we all enjoy a touch of the trampy when it comes to SL and having a completely safe environment to explore the limits of good taste is an indulgence most people I know flirt with now and then. But I cannot believe that the average SL consumer has become so mindless of their own best interest that content creators latched onto it and began trending their prices to align. This might be a case where my belief in SL consumers and fellow shoppers is higher than reality, but I think this more an effect of steep spikes in prices rather than a root cause of the issue.
D. Lack of Critical Blogging to Keep Market in Check. With some small measure of guilt, I can acknowledge that this might be a factor, but, again, I see it more as something that addresses the issue after the fact and isn’t a *cause* per se.
E. No Consumer Memory of Value. This theory goes that because high-end designer shoes weren’t a significant influence on the market when consumers had their most beneficial ratio of L$ exchange rate to in-world pricing, they mentally over-inflate the value of shoes. I’m not sure I buy this, but it does hold with the timeline and the math, so I’ll present it as something worth mentioning.
So, if I reject the above, where does my personal speculation lead me?
Well, I believe the shoe market is in the state it’s in largely due to merchandising brands offsetting mark-up costs paid out to ghost creators.
Once, more, in English. With history.
Let’s recall when Armidi came on the scene. With Armidi, we had what was really the first example of a merchandiser paying creators to abandon their own brands. I’m not going to reveal names and numbers because most of what I know is either second-hand or told to me in confidence. The who and the L$ isn’t as important as the how and why.
Do not mistake what I am saying here. Armidi was not (to my knowledge) unethical and whether they fold or continue from here, they can be regarded as an interesting experiment in bringing RL business practice into SL. One can see why it was appealing to designers. Most designers want to create — they don’t want to deal with the exhausting tasks of marketing, land management, and customer service. Anyone who’s had to package their items and deal with customers knows the toll it takes on creativity and production.
Where Armidi’s model broke down for me was that while their marketing always did a good job, their customer service didn’t exist and they disengaged from consumers in a way that made shopping there risky. If there was a glitch or problem, you were out of luck. I began to dislike the way they did business, and no matter how pretty the stuff was, I began to avoid them by and large. But, the Armidi effect resonated through SL. More and more designers began to like the idea of broadening their brands by partnering (either openly or behind closed doors) with other content creators. While there have always been partnerships in SL where one RL person was the “brand” and the another was the workhorse (*cough* Last Call *cough*) Armidi changed the landscape in how this was done. It was no longer a practice of RL partners converging together in SL. The introduction of the concept of expanding brands beyond the initial designer’s scope meant that you’d often hear of a designer looking for someone to make their jewelry for them or their shoes for them.
Obviously, when you pay a designer to make something for you to market under your own brand, you then have to mark up the price to include your own profit. This gets more significant if the arrangement is percentage based instead of an up-front sum, the more designers you add on and profit-share with, etc. It especially gets expensive when the creators know their own economics and expect full market value for their own work.
I do not know if the individuals who control the brand marketing behind lines like Maitreya and/or Stiletto Moody and a handful of others are the sole content creators of their lines, or if they’re hiring out creations (or creation elements). There is nothing wrong with them doing so. However, if that is the case and these inflated prices are just the result of covering profit margins, the SL consumer, by accepting these prices, is painting themselves into a corner. They are attaching their spending loyalty to a brand that represents no one in particular and they’re sacrificing value for the convenience and mark-up of merchandisers. In exchange the consumer really isn’t getting anything.
Those designers hitting the ceiling in today’s shoe market certainly do not owe me or anyone else answers on this issue; their business practices are their own affair — they’ve put their wares out and we have the consumer option to purchase or not purchase. My concern with looking for causes is simply to understand the new landscape and discern if it’s something that can be reigned in, or if it’s an inevitable shift. As a consumer I can only make my own choices and hope enough others share my concerns to adjust the market back to where I believe it should be. Naturally, I could be the outsider of that mindset.
However, this state of affairs does invite speculation and that’s all I’m offering here in attempt to make sense of why the shoe market is where it is. Will we look back and view these prices as we do the over-inflated RaC skins of 2006, or is this a pricing restructure we’re going to allow to become the standard? If it is something we’re going to allow, then we should at least know why we’re allowing it and what we’re getting in return — which, as far as I can see is neither superior quality or product, but merely additional spending for spending’s sake.