Accessory companies haven’t been doing so well for the last few years, especially brands that are pricey but not too pricey, like Coach, Michael Kors, and Kate Spade. A few years ago, Coach decided to pursue wealthier customers and sell higher-priced bags, and that strategy is apparently paying off.
Brands in this price range end up competing with themselves, confusing consumers, and hurting their own reputations by offering merchandise in boutiques, in department stores, and in their own outlet stores. Kenneth Cole recently shut down all of its stores, most of which were outlets.
Coach began to fight this problem in 2014, taking aim at the higher end of the handbag market. Its 1941 collection, with list prices between $295 and $1,500, has become more popular than one might have expected a few years ago. Sales of bags that cost more than $400 are up, and the top seller in the last few months of 2016 has been the brand’s Rogue bag, which starts at $795.
“That’s a bag that a year ago, we wouldn’t have had permission to sell,” the company’s president of global marketing told Fortune magazine. They could have sold it, but customers wouldn’t have accepted it — or, more importantly, probably wouldn’t have paid list price for it.
It’s not a coincidence that in the last year, the company pulled its products from department stores, believing that their relentless discounting hurts luxury brands and confuses customers.
Did the brand really turn around that quickly? Customer surveys indicate that apparently we all have short attention spans; more consumers thought of the brand as a “discount” one a year ago compared to now.
Source: Consumer Reviews