Hello readers!
The first edition of Fashion Business Reader will bring you up to date on everything you need to know about the most fashion-obsessed women’s (and not only) accessory - luxury designer handbag.
A decade ago, in May 2010, late Vogue Italia editor Franca Sozzani wrote:
Every single minute we hear about a purse that's bound to be unique […] If it's in fashion, you have to have "it".
Iconic ones like the Jackie O by Gucci […], or the Birkin and Kelly by Hermès, or even other ones worn by famous women known for their style. The last ones being Lady D by Dior and D bag by Tod's.
Above all others, since forever, exists Chanel's signature bag in all its forms: going from the original one to new reinventions, sizes, shapes and colors.
Louis Vuitton […] Prada […] How to forget the Fendi Baguette in all of its versions […] Nowadays we see new phenomenon born everyday, and it is precisely using bags that brands try to re-establish their name. Women go crazy for bags, […].
A bag is a symbol of something. You belong to a specific tribe by wearing one. You change your tribe as much as you change your purse.
A bag defines your whole way of being, your style, and divides your opinions about taste. Big, extra large, medium or small, the choice has nothing to do with preference, but with a deep thought behind it. […].
Among brands mentioned by Franca Sozzani, three names stand out in the handbag category: Louis Vuitton, Chanel and Hermes. These luxury houses were able to create timeless products that hold their value and popularity, remaining true icons and investment pieces.
The myths around Hermes’s waiting list made Birkin the ultimate status symbol:
the exclusivity — both perceived and real (from price and specific design details) — generates plenty of cultural cachet and continues the cycle of sales.
Nevertheless, with a rise of luxury resale platforms (e.g. Vestiaire Collective, The RealReal, Fashionphile) analysts argue Can the Birkin Bag Survive the Resale Market?
“some of the most coveted accessories are available on your phone in seconds.” At any given point, these resellers tend to “have more Birkins in stock online than Hermès stores,” and such volumes are “game changing”. Resale is, “the one channel that brands are so far largely unable to mould in terms of either volumes or pricing — and that in itself is hugely disruptive.”
While majority of luxury brands still see resale market as a threat, earlier this year luxury fashion e-tailer Farfetch launched Second Life program, which allows customers to exchange their pre-loved designer bags for store credits, thus building customers loyalty and supporting sustainability.
Related article: Why Luxury Brands Should Celebrate the Preowned Boom
So what is the psychology behind luxury handbag obsession? As former British Vogue editor Alexander Shulman puts it:
The handbag was part of the changes brought about after the First World War and the increasing emancipation of women, for whom carrying a bag became a sign of independence and stature. Women had their own cash and bank accounts, and keys to their own property and cars — and they wanted the world to know it. […]
For most women their handbag is a multi-tasking device that combines the virtues of practicality and utility: along with showing off personal taste, it suggests a certain economic prosperity and acts as a soupcon of the childhood security blanket. While women may often play it safe, either due to workplace convention or simply their lack of interest in clothes and so choose to dress unremarkably in their daily life, these same women will frequently have a standout handbag.
Indeed, the evolution of consumer behaviour impacts the state of the market. In the US, however handbag market is currently in decline:
According to an October report from The NPD Group, the handbag business is down 20 percent in the first eight months of 2019, compared to 2016.
The main driver of this decline is a shift in consumer behaviour:
- increased spending toward other products categories and the new fashion status symbols – active apparel and footwear
- higher expectations from function and versatility to a brand’s engagement in the social and environmental issues that matter to consumers
- rise of sharing economy and resale segment
Another negative effect is expected from upcoming trade tariffs on European goods imported to the USA, which will result in the rise of handbag prices.
The End of the It Bag Era… How We Know It
The market is flooded with more choices and points of sale than ever, all aimed at an ever-discerning consumer base — making the bag market a highly competitive category with little wiggle room for dominant success. […]
In the ‘It’ bag’s heyday, designer status-driven consumption was a relatively new phenomenon on a commercial level. In the last 20 years, though, this practice has since “become part of our buying culture,” […] “Everyone on the runway has a bag, it was a status symbol, but today our status symbols have changed.” […]
Louis Vuitton Speedy, Louis Vuitton Noe and Hermes Kelly were released in 1930s, while Hermes Birkin and Chanel Classic Flap Bag in the 1980s, nevertheless, these styles have stood the test of time and become symbolic of their respective houses.
Other luxury brands despite having iconic designs, haven’t yet established the same everlasting heritage: some have fallen "out of fashion" and are now making a comeback. A case in point is Dior: during summer 2018, the wave of fashion influencers posted images of themselves wearing the Saddle bag, all at the exact same time, announcing the bag revival. A year after, Fendi also brought back its cult-favorite Baguette.
Related article: Why It Bags Are Making a Comeback
However, the use social media has impacted both consumer behaviour and marketing practices:
“It will be interesting to see if such a big-bang launch campaign will speed up the product’s life cycle—if it’s already everywhere then how long before it’s over?”
In fact, it was argued that social media reduces life cycle of the fashion products:
Some blame the end of the It bag on Instagram. Social media exposes customers to trends so quickly that excitement is extinguished before most new styles can gain sales momentum. When Fendi launched the Baguette in 1997, the ensuing buzz sustained sales for years, and the iconic model was regularly sold out in New York department stores. Such was its impact that when its popularity fell after two years, the LVMH brand’s sales declined by $20 million for two years in a row.
Today, trends have to reach a level of internet virality to stay in the spotlight. […]
While the new It bags may no longer be sure successes, classic styles remain popular on resale platforms. “Classic It bags have long-lasting value, while more trendy It bags have a shorter lifespan,” […]
Forty-four per cent of global luxury consumers consider the resale value of an item before they buy it, and labels are reintroducing classic styles to attract those value-conscious shoppers. Fendi re-released the Baguette this year, while Dior brought back its iconic Saddle Bag in 2018. These classic It Bags have by all accounts performed well, but not generated anything close to the hype of the originals.
Today if you scroll through the feed of any fashion Youtuber, you’ll find a series of video themed “My Designer Handbag Collection”, “Timeless Bags Worth Investment”, “What’s In My Handbag”, including in-depth reviews of pros and cons of each handbag.
Indeed, there are handbag influencers on social media, highly specialised in this niche and sharing their expertise with their loyal following. The most successful ones partner up with fashion brands, creating their limited edition collections.
Related article: The Business of Making a Mr. Bags
In the West, the creation of It-bag phenomenon is mainly driven by fashion influencers and the brand’s owned media. In China, the following logic should be followed to create a hit product:
Good and Recognizable Design
[…] due to an increased level of sophistication younger Chinese consumers have started to appreciate more nuanced elements including design, fabric, and the production process; a good and recognizable design becomes the first step to establish the reputation of a handbag and facilitates a potential take-off. […]
A Chinese Nickname
“With easier nicknames, people tend to talk about them more both on social media and in daily life. With Chinese nicknames, purchasers get to know the story and the uniqueness of the bag better.” Currently, most handbag’s nicknames are based on appearance, transliteration, translation or pop culture references. […] Ultimately, the goal is to make a bag easier to remember or refer to and adding more fun to the name adds even more value. […]
Related article: What Prada’s 'Murderer Bag' Says About China's Luxury Market
KOLs and Celebrity Endorsement
Brands who want to create an It bag should not miss out on vital celebrity and KOL strategies; in fact, on the mainland, trusted celebrities and KOLs connect better with consumers than brands. […] Chinese frantic celebrity culture contributes to a very unique scene where an association of a handbag to a prominent celebrity … can massively drive the exposure and sales of the bag.
User-Generated Content
Besides the more official voices of KOLs and celebrities, user-generated content in 2019 has been a driving force in the creation of an It bag — namely for its ability to create and escalate a trend, quickly. […] Brands should also monitor real-time reflections of popularity and be nimble enough to understand a trend and capitalize on the rise in demand by promoting it.
Recommended reading: Why Emerging Designer Handbags Are Having Better Luck In China Than Big Luxury
Another interesting trend spreading in China is “unisex bag”:
China’s fashion scene is undergoing an accelerated transformation of gendered identity. The number of male fashion bloggers on Chinese social media is spiking, boosted by now widespread “Little Fresh Meat” male idol phenomenon. On Weibo and Little Red Book, popular hashtags such as #男生怎么穿 (what men wear) and #实用男包推荐 (practical men bag recommendation) give a sneak peek into the country’s male fashionista community […]. From posting about everyday tote, utility pouch, to logo-laden fanny packs, Chinese men fashionistas pursue the It bag just as fervently as women do.
In China, owning fashion-forward, big-name bags is a much more mainstream practice among the millennial men. Thanks to the broad gender fluidity trend in fashion, many old-time It bags for women now have launched their men versions: Fendi‘s Peekaboo, Dior’s Saddle bag, Loewe’s Puzzle bag, Louis Vuitton‘s Soft Trunk collection, to name a few. According to social posts, some Chinese women also opt for these men’s versions for a more oversized, effortless chic look.
Thus, as gender norms shift, we will see more luxury brands focusing on creating products with more unisex appeal.
Finally, if I had to name the it-bag of 2019 it would be definitely Bottega Veneta’s the Pouch bag. It was hard to not spot this leather clutch during fashion weeks in Milan, Paris, London and New York or all the buzz around it on Instagram. No wonder, this December both Bottega Veneta and its Creative Director Daniel Lee were awarded by the British Fashion Awards as Brand of the Year and Designer of the Year, respectively.
Thanks for reading,
Assiya Assanbayeva
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