RETAILWIRE DISCUSSION TOPIC
Women Wear Their Wealth on Their Arms – 1/24/08
High tickets apparently indicate high fashion, at least where bags are concerned among the mega-rich on both sides of the Atlantic. Whether or not the fad has reached its peak, this season’s must-haves include a couple of bags that are ordered at select parties attended only by invitation. Heaven forbid retailers should expect customers prepared to spend five or more figures to just wander into a store for a browse.
The newest example of the expensive bag genre is one by Burberry, made of alligator skin and selling for £13,000 ($25,737). It’s not as expensive as the Chanel bag with the diamond studded clasp that costs in the region of £100,000 ($197,980) or last year’s Louis Vuitton version that sold out in spite of (or because of?) being priced at £23,484 ($46,494).
For all the show-offs who take pride in owning something that so few other people can afford, there are far more women who are happy to have a large wardrobe of bags that each cost a mere fraction of what their wealthy sisters are flaunting.
There is plenty going on at the less expensive end of the market, however. Whether it be copies sold for pence rather than pounds or eco-friendly bags like those designed by Anya Hindmarch and Stella McCartney, most women can decide what kind of a statement they want to make without taking out an additional mortgage to cover the cost.
Discussion questions: What do you think is driving the trend toward ultra-expensive handbags? Do aspirational purchases represent a bigger opportunity for retailers today than the past? Do you think consumers will back off these types of purchases in light of the current economic climate?
Handbags and other accessories continue to shine as apparel makers fail to excite us – largely due to retailers over-saturating us with a few looks how many cropped, 3/4 sleeve cardigans does a woman really need?). Until that changes, expect the accessories market to remain strong as women will continue to desire a great look.
The trend of wildly expensive 1-of or few-of-a-kind bags has been going on for some time now, driven by brilliant marketing from brands owned by the “big 3” luxury players: LVMH, Richemont, and PPR. Their careful strategies of real and perceived scarcity, artisan craftsmanship, and celebrity buyers will continue to drive the top-end luxury bag market, as well as inspire the aspirational brands and consumers. The current economic malaise will not last forever, but purchases of aspirational labels like Coach and Dooney & Burke will not be as robust as true luxury brands like Hermes and Louis Vuitton. Any drop off from the aspirational buyers of these elite brands will be more than made up by the top end. Further, unless there is a true and sustained worldwide downturn, I expect markets outside the US to keep these brands growing.
Finally, the nascent but growing luxury bag on-line rental services will ensure that anyone of at least moderate income means can sport a Chanel, a Prada, a Louis Vuitton…
Mike Osorio, your Dare to be Contagious! strategist www.OsorioGroup.com
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