Designer bags and small leather goods (SLG) show no sign of abandoning their role as the mainstay of luxury houses. The category, at $72 billion today, is expected to grow to $100 billion by 2027 despite the lingering effects of the pandemic and today’s growing economic pressures, according to The new era of designer bags: redefining leather goodsthe latest report from BoF Insights.
Most of this growth will take place in the world’s two largest markets for designer bags and SLGs: the United States and China. Exclusive research from BoF Insights reveals that while shopping behaviors and tastes are changing, consumers in both countries remain loyal to the category that offers functionality, style and, in many cases, a much-loved status symbol. Among the general population surveyed in June 2022, approximately 40% in the United States and 50% in China are consumers “engaged” in the category, having purchased designer bags or SLGs in the past year or having the intention to buy next year. In both countries, nearly all high net worth individuals (HNWIs) – with investable assets with a median value between $1.5 million and $2 million – are engaged in the category.
For brands, the market for designer bags and SLGs is increasingly crowded. To stay relevant, designer brands aim to “own” a specific style, whether in terms of silhouettes, materials or colorways, which often requires a balance of classic and new features in a portfolio. Even so, imitation is rife in the category and once a brand designs what becomes an “It” bag, rivals often aim to market their own versions of that design, creating pressure to be in a cycle. of constant innovation.
Heritage brands are often now in direct competition with contemporary brands that have identified and quickly filled gaps in the market. For incumbents and newcomers alike, the collections must now speak of a broader definition of “luxury”, which taps into a new spirit of the times that values accessibility, precariousness and durability. Bag strategies that seek to elevate brands, optimize pricing and innovate with celebrity connections must also consider the communities they wish to belong to and the value systems their consumers belong to.
As the first in a series of category-focused analyzes from the team at BoF Insights – The business of fashionThe data and analytics think tank’s report also explores how brands and retailers need to sharpen their strategies to prepare for the next chapter of designer bags and SLGs, as consumers are already changing. how and where they buy products from the category.
Research from BoF Insights reveals that more than half of engaged consumer journeys in this category now begin with online browsing and, in the case of China, are influenced by live streaming. Meanwhile, resale and rental have evolved significantly from their former existence in brick-and-mortar stores, allowing greater access for consumers and changing the way they view and value bags as investment assets. .
- Analyzes the global market for designer bags and SLGs of high-end and luxury brands, with a minimum retail price of $250 / 1,500 Chinese Yuan.
- Features exclusive research from consumers and HNWIs in the US and China, revealing the most in-demand brands and styles, budget by demographic, psychology behind purchases, and consumer attitudes towards channels like resale and rental.
- Provides advice to management on brand elevation tactics, including pricing architecture.
- Includes concise case studies of Burberry, Saint Laurent, Mansur Gavriel, Telfar and Rimowa, as well as strategic analysis of key brands positioned across the price spectrum, such as Bottega Veneta, Coach, Gucci, Hermès, Jacquemus, Kate Spade, Louis Vuitton, Mark Cross, Off White, Prada and Stella McCartney.
- Describes how the competing forces of affordability, precariousness, and sustainability expand the definition of luxury while assessing the impact of technology on consumer behavior and product portfolios.
The report is based on three proprietary research inputs:
- Four exclusive surveys:
- A demographically balanced survey of the general population in the United States
- A nationally representative general population consumer survey of the online population in Tier 1-3 cities in China
- A panel conducted by Altiant LuxuryOpinions® on behalf of BoF Insights of HNWIs in the United States, who individually have a median value of $2 million in investable assets
- A panel conducted by Altiant LuxuryOpinions® on behalf of BoF Insights of HNWIs in China, who individually have a median value of $1.5 million in investable assets
- 24 interviews with executives of brands, retailers, rental and resale platforms, influencers and consultants in the United States and China
- 10 in-person store audits and impulse interviews conducted with designer bag brands and luxury retailers in Chicago, London and New York
Companies featured in the report include: Bottega Veneta, Burberry, Coach, Gucci, Hermès, Jacquemus, Kate Spade, Louis Vuitton, Mansur Gavriel, Mark Cross, Off-White, Prada, Rimowa, Saint Laurent, Stella McCartney and Telfar.