Luxury labels tap younger consumers via directional handbags, sneakers
Accessories and footwear account for a 75% share of the luxury fashion market, while the remaining 25% belongs to ready-to-wear. Sneakers and handbags are top of the list as the gateways to the world of luxury labels, notably for non-aficionados and younger consumers seeking recognition. Hence the importance for labels of expanding these categories and picking the right price positioning, as shown in a study by Belgian marketing metrics specialist Retviews.
Handbags and footwear account for 50% (respectively 30% and 20%) of the accessories market’s product range. They are more enduring and less dependent on trends than clothes, and they are also attractive to younger consumers as status symbols, as well as being generally more affordable than other product categories. Handbags and footwear are a significant source of revenue for labels, and are also among the most profitable products thanks to their high margins.
Handbags account for nearly 40% of the range of bags featured by leading luxury labels, with the exception of Balenciaga, whose prime product type is belt bags. “The popularity of this type of street-style-inspired bag is growing constantly,” said Retviews, which also spotted plenty of belt bags at Prada and Gucci.
“Dior has even created a strap, priced at €800, which can be attached to its iconic Saddle handbag, turning it into a belt bag. Our data shows a growing presence of street-style and informal products, evidence of the luxury labels’ focus on targeting younger generations,” while travel bags are more widely available at long-established labels like Saint Laurent and Dior, according to Retviews.
Luxe handbags are mostly made in classic leather (54% of them), with canvas the second-ranked material (18%). Gucci instead features nearly as many canvas handbags (a share of 34.8%) as it does leather ones (36.5%), further evidence of the Kering group's leading label’s interest in attracting the attention of younger consumers with cheaper handbags. At Prada, nylon, the label's signature material, is the second most utilised material after leather, again enabling the label to reach a broader audience.
Price-wise, the analysis of the top luxury labels’ signature handbags reveals a wide variation, from €525 for the Chiquito bag by Jacquemus to €4,700 for Chanel’s Boy model, and well above that for the renowned Kelly and Birkin models by Hermès.
“Labels like Prada, Saint Laurent and Jacquemus have a lower price positioning than maisons that target higher-income consumers like Chanel and Dior. Looking at all-purpose bags, we found that Balenciaga and Saint Laurent, which are increasingly appealing to a young demographic, prevalently feature the lowest prices,” said Retviews.
“Prices at Gucci, one of the most directional labels, are not among the highest. This clearly confirms the label’s intention to target young consumers and make them loyal to the brand,” said the study's author, Virginie Lê. This Gen Z-oriented strategy is even more evident in the sneaker category, one that is naturally destined to the younger generations and whose products are a classic gateway to luxury labels.
Over half of Balenciaga's shoes range consists of sneakers
Sneakers have become an essential staple in the luxury market. Last year, they accounted for over 40% of men's footwear sales at Hermès and Louis Vuitton, for 70% at Pierre Hardy and Gucci, and for 90% at Balenciaga, according to a survey carried out by Capital in 2019.
Within the footwear market as a whole, the sneaker category accounts for the single highest share with 23.5%. A share that rises to 57.4% in the Balenciaga men’s and women’s range, while it is 23% at Gucci and 22.9% at Prada, found Retviews.
“We didn't expect sneakers to have such a large share of the product range in luxury labels. It is clearly a major trend, consistent also with the enduring appeal of streetwear. As with handbags, the pricepoints [of sneakers] are by and large at the low end of the spectrum. Although Balenciaga’s Triple S model, which sells at about €690, remains the best-seller,” said Lê.
According to Retviews data, a classic label like Dior, whose sneaker range is the most scant, has opted for a higher price positioning for its models, close to that of Balenciaga, without however putting off its customers. Prada, Saint Laurent and Gucci, all aiming to increasingly tap Gen Z and Millennial consumers, have instead opted for much lower prices.
Labels also have to ensure that their prices are consistent across countries and sales channels. The Retviews study found that huge disparities still exist, potentially undermining the credibility of some labels and tarnishing their image. For example, the prices of Chanel handbags are higher in France than elsewhere. In the USA, the price of the 2.55 model is 12% lower than in France.
Of course, prices may vary between markets depending on exchange rates, import duties and local purchasing power but, in the last few years, the luxury industry has been striving for a degree of consistency with its prices the world over, while e-tail is pushing the sector to become increasingly transparent.
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