In fashion merchandising, what does “discretionary income” typically refer to?

Discretionary income refers to the amount of money individuals have available to spend on non-essential items after they have covered their essential expenses, such as housing, food, utilities, and healthcare. This financial measure is critical in the context of fashion merchandising because it directly affects consumer behavior and purchasing decisions. When consumers have a greater amount of discretionary income, they are more likely to spend on apparel, accessories, and other luxury items that are not necessary for their day-to-day living.

Understanding discretionary income is essential for fashion merchandisers, as it helps them to identify target markets and tailor their marketing strategies appropriately. For instance, during economic upturns when individuals feel financially secure and have increased discretionary income, they might be more willing to explore higher-end fashion options or indulge in current trends.