The contemporary handbag market hasn’t had a good year. Major brands are reporting a decline in sales across all price points and luxury brands are hurting as much as mid-tier players. Accessories and handbags in particular, had been a way to convey social status, lure new consumers, and create brand loyalists, but that’s changing and brands need to understand why. Women’s Marketing provides insights into what happened to the “it” bag.
Above all, Millennials define cool as individuality—they’re not interested in a mega-brand they see on everyone else’s shoulder. As one analyst succinctly put it, “Ubiquity is death for fashionable brands, especially among young people.” Millennials are looking for unique, one-of-a-kind bags from emerging brands at the mid-tier level, and at the high-end they’re seeking exclusive heritage brands. The concept of the “It” bag doesn’t resonate with Millennials simply because they want to stand out, not blend in. This is an opportunity for emerging brands to find a niche customer and appeal to their sense of novelty and discovery—the Millennial woman needs to feel that she’s setting trends, not following them.
Quality is Key
To compete with similar brands, many designers chose to compete on price by cutting quality. Brands aiming for “affordable luxury” are now mass-market casualties. Because they’ve discounted so heavily, and consumers have come to expect it, they have to control costs so aggressively that it ends up being a mediocre product. This devalued these brands in the eyes of the consumer. Quality is a key purchase factor for Millennial consumers—they are willing to pay more for brands they feel are heritage pieces. Emerging brands that provide high quality, handcrafted products are more likely to appeal to fashion conscious women.
At the luxury level, consumers are investing in miniature versions of classic bags, such as the Fendi Micro-Baguette, for fall. The petite-sized bags offer the same cachet as full-size handbags, but at a significantly lower price point. Increasingly, luxury brands are offering smaller versions of their classic bags in on-trend colors and styles and in-turn, keeping their brands relevant.
Brands wishing to remain competitive will have to change their marketing strategy to appeal to the desires and values of today’s consumer. Offering a unique, high quality product and developing messaging that appeals to the Millennial sense of individuality will help emerging brands attract consumers in a crowded marketplace. Will your brand make the cut? Contact Women’s Marketing for a review of your marketing and media strategy.
(For more insights: we've previously looked at Millennial buying power and understanding how to market to Millennials and building brand loyalty among Millennials .)
Sources: Women’s Wear Daily The Drag on Bags, August 24; Wall Street Journal Popular or Overexposed, August 2014; Racked It’s Time to Admit That Prada’s in Decline, January 2015, Wall Street Journal Handbag Prices Begin to Meet Their Limit, March 2015