Wednesday, December 2, 2015

The Ugly Christmas Sweater Trend

Ally Condon
Mr. Reuter
Econ
December 1 2015
The Ugly Christmas Sweater Trend
With Christmas just around the corner, it seems like everyone is trying to find their ‘ugly Christmas sweater’ for the holidays. Each sweater you see is uglier than the next, adorned with all the bells and whistles-literally. Themed parties have become more and more common creating an increase in demand for them.The trend has gotten so popular that higher end stores like H and M and Nordstrom have started reaping the benefits of this craze (Source 1). In fact, there is even a website that purposefully makes ugly sweaters called uglychristmassweater.com. Now, instead of rummaging at Goodwill or looking through your mom’s closet, you can purchase them new online or in stores. No more hurt feelings when your mom sees you wearing her sweater on ugly Christmas sweater day! There is a tradeoff though; with more selection and accessibility, they’ve become quite expensive. Prices range anywhere from 30 to 70 dollars, and since they are an inelastic good, people are willing to pay that price because you can’t substitute anything for it.
The demand for these tacky sweaters are enormously high during the winter season, and in places like Goodwill and the Salvation Army, the amount in stock is scarce because everything has gotten picked over. To prevent shortages, more and more retailers have started carrying sweaters creating an increase in supply. Since the demand is so high for only a small period of time, suppliers can increase the prices during the christmas season. Stores cannot price them too outrageously though because it is not a monopoly. There are many firms with similar products, and if a retailer's prices are too high, consumers will just go somewhere else. In other words, the market of ugly Christmas sweaters is a perfect competition, which means no single seller controls the prices. If the cost of buying a sweater is too great, another option that has been created which are DIY Kits. At 30 dollars, they include a sweater, stencils, and embellishments and you make them yourself. According to Meri Barnes, product and business developer for the company who makes these kits “[She’s] never seen a product or category blow up like this.” Last year they sold 35,000 kits, and they’re expected to sell 400,000 this year (Source 2). The amount of revenue brought in by these sweaters is enough for small businesses like this to survive throughout the year, despite having a seasonal product. Some individual entrepreneurs have even started selling these corny sweaters on Ebay. One woman paid for her two son’s college tuition with the millions of revenue she made after selling 25,000 sweaters (Source 2).
What started as a funny themed party idea has now expanded to a phenomenon. Ugly Christmas sweaters have impacted the market in a positive way not only for the consumer but the supplier as well. Each year, the sweaters get uglier and more accessible, and the suppliers get richer. The only opportunity cost is money, and if the trend continues in this way, customers will continue to pay the price.

Sources:
  1. "A Brief History of the Ugly Christmas Sweater." NewsFeed A Brief History of the Ugly Christmas Sweater Comments. Web. 1 Dec. 2015.
  2. "The Big Business of Ugly Christmas Sweaters." Bloomberg.com. Bloomberg. Web. 1 Dec. 2015.


29 comments:

  1. I was very surprised to see that a woman who sold sweaters on eBay made that much money! Ugly Christmas sweaters are getting way too expensive for what you are actually getting out of it. However, it's very convenient that they are everywhere now and that it is a perfect competition. I don't think ugly Christmas sweaters will ever become unpopular, so that's great for the suppliers!

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  2. I think ugly Christmas themed events have been around a lot more than stated but have grown in popularity in the past few years. As people jump on the bandwagon, there's a higher demands, people are even going out of their way to make an ugly sweater, which seems a bit redundent seeing you wear it maybe oonce or twice a year. I think as the trend steadily grows the more revenue will come from it.

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  3. It's totally not surprising the ugly Christmas sweaters are in such high demand during this time of year, due to the fact that everyone needs their classic, tacky sweater for the holidays. However, I don't necessarily agree with the fact that ugly Christmas sweaters are inelastic goods. If you're tight on money, I don't think that one of these sweaters is going to be a fixed part in your winter budget. As the prices continue to increase, less people will want to buy them, since it's just one sweater that you can wear only during a certain time of year. Christmas sweaters are much more elastic, since they're not a necessity - you could just wear any old red or green shirt if you really want to show your holiday spirit. But overall, great topic!

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  4. Ugly Christmas sweaters have always been a fun part of the holidays in my family, the only tricky part was asking my grandma if I could borrow one and not laugh at the choices she gave me. I have never put much thought into the economics behind the fun holiday tradition but it makes sense that some people make a living off of the profits! Even though the sweaters aren't very fashionable they still cost the same if not more than anything you would wear on a regular day. It seems crazy to me that someone would spend so much money on something you can only wear once a year, but here I am getting ready to attend the annual "Ugly Christmas Sweater Party."

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  5. This is a perfect time to write about this topic. I know I love picking out and finding the perfect ugly Christmas sweater. As you stated, the demand for these are huge, so the price is very high. It is unfortunate that the prices are so high, but the sellers are able to this. Recently, I went shopping for an ugly Christmas sweater and it seemed to me that the uglier the sweater, the higher the price. Since the prices are so high, I think it is very cool that you can make your own sweater, because I think more people would rather spend money on making their own sweater, than buying an expensive one they did not make. Although your topic was very interesting, you could have talked about how the trend of ugly Christmas sweaters became so big, that vests and other things such as socks and pants are now being sold to go along with the sweater. Overall, I really enjoyed reading your post and how you were able to connect it very well to economics.

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  6. Although the demand has increased, firms still need to be careful how high they price their products. If they reach too high, people will settle for less-ugly Christmas sweaters. I clicked on the link and was surprised to see how high the prices were. I think that making your own sweater, or using the one that your grandma made you, has more appeal to people because it is more personalize. If the firms get too cocky with their products they will lose their customers to other firms or customers will go back to raiding through their mom's closets.

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  7. Although the demand has increased, firms still need to be careful how high they price their products. If they reach too high, people will settle for less-ugly Christmas sweaters. I clicked on the link and was surprised to see how high the prices were. I think that making your own sweater, or using the one that your grandma made you, has more appeal to people because it is more personalize. If the firms get too cocky with their products they will lose their customers to other firms or customers will go back to raiding through their mom's closets.

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  10. It is no surprise that ugly Christmas sweaters are in such high demand during the Christmas season. Everyone should own an ugly Christmas sweater for a Christmas party or just to wear around for fun. This post was appealing to me because yesterday I actually went to Walmart and Menards to look for a Christmas sweater for this weekend; I found that the prices have significantly increased over the years because the demand is so high. Unfortunately, these high prices turned me away from the ugly sweater rack because I am not willing to spend over $15.00 for a sweater I will wear once this year. Regarding your post, I have to argue with you're statement that ugly Christmas sweaters are inelastic goods because it is only a necessity for about a month; even then, people can make their own Christmas sweaters or find a festive t-shirt for much cheaper if one can't afford it.

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  11. It makes sense with the holiday coming up that the the demand for ugly Christmas sweaters are increasing. However, the product used to be more limited with certain stores but over the years it seems to have become something bigger. Stores now make a huge profit from it because buy those sweaters are higher prices just for the one time use. Some stores price way too high which can hurt them. There really isn't a substitute for it, but there other stores and the customers will have to settle for something else.

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  12. I completely agree with what you're saying about the increase in demand for Ugly Sweaters, they're fun and cozy. I can see the increase in price. At first they were mostly all made by a family member and then you would wear it and then be embarrassed about it and now they are the new trend. I plan on getting mine soon. I was going to get matching one's with my sister since she doesn't have one. We are bot December babies and since we might move farther apart due to college and career goals at least we would have the ugly sweater to come back to.

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  13. Ugly Christmas sweaters are a big tradition in my family; in fact, my parents often throw their own ugly Christmas sweater party every year. However, I would contest that they are not an inelastic good. Although they are fun for everyone, you only need one or two to last a decade of Christmases. I've alternated between the same two for the past few years, and don't feel the need to purchase a new one because I only wear them twice or three times a year. However, it doesn't surprise me that DIY sweaters are becoming popular. In the past year or two, DIY has become a huge trend, because it's cheaper, and people feel like they have more control over their final product when they can make and decorate something exactly how they want.

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  14. I would actually argue that ugly Christmas sweaters’ demand is elastic, as it will decrease greatly after the holiday season. I do, however, agree that during the winter months leading to Christmas, the demand will increase for such clothing due to parties and the cold weather. But since there are also many substitutions available to potential consumers, the $30 to $70 spent on ugly sweaters (specifically in the link provided) may push them towards their mother’s closet since it costs virtually nothing. Additionally, there is not much incentive to purchase more an ugly sweater more than once every few years since they are only worn during the holidays. Despite this “seasonal demand,” and when disregarding the consumers who opt for their parent’s old sweaters, I do still see a value in new companies producing these ugly sweaters. Not only have I seen them in retail stores, but also on a popular TV Show where entrepreneurs bring their business ideas to investors. “Shark Tank”. I certainly considered buying an ugly sweater from the company pitching to the investors, until I saw the price tag! I think it really depends on the consumer.

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  15. I think it's really interesting how much the market of sweaters have changed over the years. It's crazy that it changed from something that used to be just an old sweater to something that is actually its own product now. Also how most of the people buying the sweaters don't even realize the concept of them and how it used to be. Overall I thought it was really interesting how much these products have spiked up the past few years.

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  17. Ally, I love your topic! I personally have to wear ugly Christmas sweaters weekly for my job. I have tried to look for ugly sweaters at Goodwill but because of the new interest, I often end up empty handed. I can see how stores would recognize the higher demand for the product. Although, I find it frustrating that they are raising the prices to $70. I realized its a trend but I didn't realize that it was an inelastic good. Overall, I really thought you decided on a fun topic to write about just in time for the holiday season.

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  18. I really liked your topic and you raised a lot of ideas in this article that I didn't consider before. In previous years, people didn't want to buy ugly Christmas sweaters, because they were ugly. However, in the more recent years, the demand has increased so much. They have become a product that people go out to buy, not just an impulse buy. Since you only wear it one day of the year, I wonder how that will effect the amount of ugly sweaters purchased by each consumer.

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  19. I really like your topic considering Christmas is right around the corner. My mom always bought me ugly sweaters (she thought they were cute) and I would always just use them for ugly sweater Christmas parties because I would never wear them out in public. You brought up a lot of good ideas that I really never thought about before.

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  20. This was a good topic! I have noticed many stores now carrying ugly sweaters, I have also noticed the prices of them. Some are quite high for a sweater you may only wear once a year. There are more ugly Christmas sweater parties now so maybe they demand will continue to rise but soon, that demand will be back down after the craze of the holidays ends.

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  21. Today we see these ugly Christmas sweaters everywhere. At first it was most likely just a tacky thing the weird relatives did every year, but now it is a tradition for some people. Even last year at Mayfair they had opened up a store solely for ugly Christmas sweaters. These sweaters are virtually everywhere. And the consumers for them are going to most likely keep growing and growing as the ridiculous parties or events designed around ugly Christmas sweaters. However, the price of these sweaters is sometimes unreasonably high. Shockingly as well since there are so many of them bought.

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  22. Your topic was a really good one considering the holidays. I never really thought about how popular ugly Christmas sweaters have become. I know a while ago I never even had an ugly Christmas sweater, but now i'm pretty sure all of us do. The demand for them have defiantly increased. Goodwill was popular when it comes to having them, but now that stores in the mall like H and M and Nordstrom is selling them i'm sure people would want their sweaters from their instead since they are newer. These sweaters aren't worn very often, so it is funny how everyone all of a sudden wants to go out and spend lots of money just on an ugly sweater.

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  23. I find this incredibly relatable because I have been at the mall lately and it seems like every store is starting to sell ugly Christmas sweaters. After searching at Goodwill many times, and not finding anything, I ended up buying one from the mall for a much higher price. I think that this trend will continue to grow year after year because there are many ugly Christmas sweater parties. People don’t want to feel left out, so they too will buy sweaters. I also think that year after year more companies will enter the market.

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  24. I agree that there is a high demand for ugly Christmas sweaters. Some stores, as you said, like Goodwill, experience a shortage because demand is much greater than the supply. Because demand is so high and it’s a seasonal good, prices can be higher during the winter season. This causes more suppliers to want to join the ugly Christmas sweater market.

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  25. Great topic to write about! Soon it will be ugly Christmas sweater season, and those gems will be in the highest demand all year. An excellent way for a big business to make more money during winter months is to start producing their own "ugly" sweaters. This is especially appealing to those consumers that wait until the last minute to go on their great sweater hunt, however given this advantage, businesses can significantly up the price in this demanded good to make more of a profit. I would disagree and say that this is an elastic good, because it is not a necessity, but it seems like with every holiday season, it does become more and more like an inelastic good. Additionally, the classic (and cheap) way of going to a second hand store is now like a competition to get a sweater because the demand is so high. Personally, I'll just take my mom's sweaters because although there are attempts at creating some ugly sweaters, nothing beats the classics that were once a serious fashion trend.

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  26. This was a great topic to choose with Christmas being so close! Personally, I think I went to 3 parties last year that were themed ugly sweaters and even more are to come this year. I thought it was really interesting how one woman could pay for her son's college just by selling sweaters during such a short time period. Stores everywhere are selling new, ugly sweaters, I even saw them at Walmart! While many people go to Walmart to find cheaper items, these sweaters were priced considerably higher than they should be. Even thought ugly sweaters are being priced so high, people continue to buy them.

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  27. This caught my attention because I've noticed a lot more places carrying ugly Christmas sweaters. A lot of the things that you mentioned, I never considered before.I thought it was interesting that the interst in them has been increasing because people only wear them once or twice a year.

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  28. As the years go on more and more people are getting into the fashion trend of wearing ugly Christmas sweaters. You would see people wearing the ugly christmas sweaters and maybe wearing them once or twice in a year but, now people are going out of their way to make these ugly Christmas sweaters if the rate keeps going up like it is there is soon going to be a higher revenue in these ugly Christmas sweaters

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  29. I always knew that ugly christmas sweaters were popular during the holidays, but I didn't know that some people actually go out and sell them on eBay. But, if this trends happens to continue in the future and gets more pricer, many people will start to go out and find something else to spend their money on or a cheaper sweater. Which will start to lower the demand on these sweaters then. Even though many people love to buy ugly sweaters, there is a limit people are willing to pay, since they have other things to consider like christmas gifts and decorations during this time of year.

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