Luxury: Coach’s Hit Handbag Shows How Less-Expensive Luxury Is Gaining Ground

Why it is the topic trending:

• Shifting Consumer Preferences in Luxury: The article highlights a change in consumer behavior within the luxury market, where mid-tier brands are outperforming ultra-luxury and fast-fashion segments. This shift in preference is a noteworthy trend.

• Economic Uncertainty Impact: The trend is linked to the current economic uncertainty, prompting consumers to seek a balance between quality, value, and price, leading to the success of less expensive luxury options.

• Brand Performance Discrepancies: The contrasting performance of different tiers within the luxury market (e.g., LVMH struggling while Coach thrives) makes this a significant topic of discussion in the retail and luxury goods industry.

Overview: The luxury goods market is experiencing a notable divergence in performance, with mid-tier brands like Coach gaining significant traction while ultra-luxury giants such as LVMH and Gucci are facing headwinds. This shift indicates a change in consumer priorities, where quality and value are being weighed more heavily against extremely high prices amid economic uncertainty. Fast fashion retailers are also struggling, suggesting a broader consumer focus on more enduring value rather than fleeting trends or aspirational ultra-luxury.

Detailed Findings:

• Mid-Tier Luxury Success:

  • Brands like Coach (Tapestry Inc.) are thriving, exemplified by the viral success of the $495 Tabby bag, which costs significantly less than similar bags from ultra-luxury brands.

  • Tapestry Inc. (also owning Kate Spade and Stuart Weitzman) raised its forecast after exceeding analyst expectations.

  • Amer Sports Inc. (owner of Salomon and Arc’teryx) also increased its projections.

  • Capri Holdings Ltd. (Michael Kors) and Hugo Boss AG outperformed market expectations.

  • Ralph Lauren Corp. saw a 13% rise in same-store sales, nearly double analyst predictions, attributed to its broad price range and classic design appeal.

• Ultra-Luxury Challenges:

  • LVMH Moët Hennessy Louis Vuitton SE reported weaker-than-expected sales, facing scrutiny over the value proposition of its high-priced items (e.g., a Dior bag reportedly costing $60 to make sold for $2,800).

  • Hermès International SCA and Gucci owner Kering SA also disappointed investors.

  • Privately-held Chanel Ltd.’s profit plunged.

• Fast Fashion Struggles:

  • Retailers like Zara (Inditex SA), H&M (Hennes & Mauritz AB), and Primark (Associated British Foods Plc) reported slower growth or missed targets, possibly due to higher prices and fewer promotions deterring shoppers.

  • JD Sports Fashion Plc experienced a decline in same-store sales.

• Economic Context:

  • US wages continued to grow in April 2025, and the unemployment rate remained low at 4.2%.

  • However, US spending in April came to a halt, suggesting consumers are being more cautious despite wage growth.

  • Tariffs are posing challenges for value-focused retailers with limited flexibility in pricing.

Key success factors of product (trend):

• Perceived Value and Quality: Mid-tier brands are offering a compelling combination of quality and design at a price point that consumers perceive as reasonable, especially in the current economic climate.

• Brand Recognition and Aspirations: Brands like Coach have strong brand recognition and still hold an aspirational appeal without the exorbitant price tags of ultra-luxury brands.

• Viral Marketing and Trend Adoption: The success of Coach’s Tabby bag highlights the power of social media and viral trends in driving demand for accessible luxury items.

• Broad Price Range (for some brands like Ralph Lauren): Offering products across different price points allows brands to cater to a wider range of consumers.

Key Takeaway: Amid economic uncertainty, consumers are becoming more discerning in their luxury spending, favoring mid-tier brands that offer a strong sense of quality and value over ultra-luxury brands whose pricing might be questioned. Fast fashion is also facing challenges, suggesting a broader shift towards more considered purchases.

Main trend: The main trend is the "Rise of Accessible Luxury," indicating a growing consumer preference for mid-tier luxury brands that offer a balance of quality, value, and aspirational appeal without the high prices of ultra-luxury goods.

Description of the trend (please name it): The trend, named "Conscious Luxury Consumption," describes the increasing tendency of consumers to be more mindful and value-driven in their purchases within the luxury market. This involves a critical evaluation of the price-to-value ratio, leading to a preference for brands that offer recognizable quality and aspirational status at a more accessible price point than ultra-luxury labels. It also suggests a potential fatigue with fleeting fast-fashion trends in favor of more enduring and well-crafted items.

What is consumer motivation:

• Seeking Quality at a Reasonable Price: Consumers want well-made items that offer durability and a sense of luxury without the extreme cost of ultra-high-end brands.

• Desire for Brand Recognition and Status: Mid-tier luxury brands often have strong brand recognition and can still provide a sense of status and aspiration.

• Increased Price Sensitivity due to Economic Uncertainty: In a weaker global economy, consumers are more conscious of their spending and may be trading down from ultra-luxury to more affordable options.

• Questioning the True Value of Ultra-Luxury: Consumers are increasingly scrutinizing the markup on ultra-luxury goods, questioning the justification for extremely high prices relative to production costs.

What is driving trend:

• Economic Uncertainty: A weaker global economy is making consumers more cautious with their spending, including on luxury items.

• Increased Transparency and Information: Consumers have more access to information about production costs and brand markups, leading to a more critical evaluation of pricing.

• Shifting Perceptions of Value: The definition of luxury is evolving, with consumers increasingly valuing quality and craftsmanship at a more accessible price point.

• Social Media Influence: Viral trends and the visibility of mid-tier luxury items on social media can drive demand and normalize these brands as desirable alternatives to ultra-luxury.

What is motivation beyond the trend:

• Personal Style and Individuality: Some consumers may be motivated by finding items that align with their personal style rather than solely focusing on high-end labels.

• Practicality and Functionality: Consumers may prioritize more practical and versatile luxury items that suit their everyday needs.

• Ethical Considerations: There might be a growing awareness of ethical sourcing and production practices, influencing consumer choices beyond just price and brand.

Description of consumers article is referring to:

• Who are they? The article refers to a broad range of consumers interested in luxury goods, with a particular focus on those who are currently or potentially in the market for handbags, apparel, and accessories. It highlights a segment that is trading down from ultra-luxury and is potentially being deterred by the rising prices and fewer promotions in the fast-fashion sector.

• What kind of products they like? They appreciate quality goods that offer value for money. They are drawn to recognizable brands that provide a sense of status and aspiration without exorbitant prices. The success of the Coach Tabby bag suggests an interest in stylish, well-designed shoulder bags that resonate on social media.

• What is their age? The article does not specify an age range, but the mention of viral trends and social media engagement suggests a significant portion of these consumers are likely younger to middle-aged adults who are active on digital platforms.

• What is their gender? While handbags are often associated with female consumers, the broader trend of seeking value and quality in luxury goods likely applies across genders interested in fashion and accessories.

• What is their income? This consumer group likely includes individuals with mid-to-upper-middle-class incomes who can afford luxury items but are more price-conscious than those who exclusively purchase ultra-luxury. It also includes some wealthier individuals who are becoming more discerning about their spending.

• What is their lifestyle? Their lifestyle likely involves an appreciation for quality and style, and they are likely aware of fashion trends and brand perceptions. They may be digitally connected and influenced by social media.

• What are their category article is referring shopping preferences? They are likely to shop for luxury goods both online and in physical stores. They are becoming more discerning and may compare prices and value across different brands and tiers. They might be less driven by fleeting trends and more focused on items that offer lasting quality and style.

• Are they low, occasional or frequent category shoppers? This group likely includes occasional to frequent shoppers of luxury goods, depending on their income level and purchasing habits. The shift suggests that even those who might have been frequent ultra-luxury shoppers are now considering mid-tier alternatives.

• What are their general shopping preferences-how they shop products, shopping motivations? They are motivated by value, quality, and brand recognition. They may research products and brands before purchasing and are likely influenced by factors beyond just price, including design, craftsmanship, and social trends. The current economic climate is making them more price-aware and value-oriented.

Conclusions: The article concludes that the luxury goods market is undergoing a significant shift, with mid-tier brands capitalizing on consumers' desire for quality and value amid economic uncertainty. This trend is evident in the strong performance of brands like Coach and Ralph Lauren, contrasting with the challenges faced by ultra-luxury giants and the struggling fast-fashion sector. The data suggests a more conscious approach to luxury consumption, where consumers are questioning exorbitant prices and seeking accessible quality.

Implications for brands:

• Focus on Value Proposition: Luxury brands, especially in the mid-tier, should emphasize the quality, craftsmanship, and enduring style of their products to resonate with value-conscious consumers.

• Maintain Brand Aspiration: While focusing on value, mid-tier brands should continue to cultivate an aspirational image that attracts consumers seeking a sense of status and achievement.

• Leverage Viral Trends and Social Media: Brands can capitalize on social media to drive awareness and demand for their accessible luxury items, as seen with the success of Coach's Tabby bag.

• Consider Price Sensitivity: Ultra-luxury brands might need to re-evaluate their pricing strategies and value communication to justify their high price points to increasingly discerning consumers.

• Adapt to Consumer Demand for Quality over Quantity: Fast fashion retailers may need to focus on improving the quality and perceived value of their offerings to retain customers who are moving away from purely trend-driven, disposable fashion.

Implication for society:

• Potential Shift in Status Symbols: The increasing popularity of mid-tier luxury could indicate a subtle shift in what is considered a desirable status symbol, with more emphasis on attainable quality.

• Greater Consumer Awareness of Value: The trend might encourage consumers to be more critical and informed about the pricing and value of goods they purchase, particularly in the luxury sector.

• Impact on Luxury Goods Industry Structure: The success of mid-tier brands could lead to a rebalancing of power within the luxury goods industry.

Implications for consumers:

• More Accessible Options for Quality Goods: Consumers have a wider range of options to access well-made and stylish luxury items at more reasonable prices.

• Increased Power to Demand Value: Consumers are becoming more discerning and are likely to demand greater value and justification for the prices they pay for luxury goods.

• Potential for More Mindful Consumption: The trend away from fast fashion could encourage more thoughtful and sustainable consumption habits.

Implication for Future:

• Continued Growth of Mid-Tier Luxury: The accessible luxury segment is likely to continue its growth as consumers remain value-conscious.

• Potential Repositioning of Ultra-Luxury Brands: Ultra-luxury brands might need to adapt their strategies to better communicate their unique value proposition or risk losing market share to mid-tier competitors.

• Evolution of Fast Fashion: Fast fashion retailers might need to rethink their business models, potentially focusing on higher quality or more sustainable practices to appeal to evolving consumer preferences.

Consumer Trend (name, detailed description): "Value-Driven Luxury": Consumers are increasingly prioritizing the value they receive for their money when purchasing luxury goods. This means they are looking for a strong combination of quality, design, brand recognition, and price, often favoring mid-tier brands that offer a compelling balance of these factors over ultra-high-end labels with exorbitant price tags.

Consumer Sub Trend (name, detailed description): "Accessible Aspiration": Consumers aspire to own luxury goods that represent a certain level of status and style, but they are increasingly seeking out brands that make this aspiration more attainable in terms of price, leading to the popularity of mid-tier luxury brands that offer a sense of prestige without breaking the bank.

Big Social Trend (name, detailed description): "The Conscious Consumer": There's a growing societal trend of consumers being more mindful about their purchasing decisions, considering factors beyond just price and brand, such as value, quality, ethics, and sustainability. This trend is influencing how consumers approach luxury goods as well.

Worldwide Social Trend (name, detailed description): "Global Economic Sensitivity": Economic uncertainties and fluctuations worldwide are impacting consumer spending habits across various sectors, including luxury goods. Consumers in many regions are becoming more cautious and value-oriented in their purchasing decisions.

Social Drive (name, detailed description): "Seeking Smart Indulgence": Consumers want to indulge in luxury goods as a form of self-reward or expression, but they are also driven by a desire to make smart financial decisions and purchase items that offer lasting value and satisfaction.

Learnings for brands to use in 2025:

• Clearly Communicate Value: Brands need to effectively communicate the quality, craftsmanship, and design elements that justify their pricing.

• Balance Exclusivity with Accessibility: While maintaining a degree of exclusivity, luxury brands should consider how to make their offerings accessible to a broader range of consumers without diluting their brand image.

• Engage with Consumers on Value Perceptions: Understand what "value" means to their target audience and tailor their messaging and product offerings accordingly.

• Monitor Economic Trends and Consumer Sentiment: Stay attuned to economic conditions and how they are influencing consumer spending habits and preferences in the luxury market.

Strategy Recommendations for brands to follow in 2025:

• Review Pricing Strategies: Brands across all tiers of luxury should review their pricing in light of consumer value perceptions and economic realities.

• Invest in Quality and Durability: Emphasize the longevity and quality of their products to appeal to consumers seeking lasting value.

• Strengthen Digital Engagement: Utilize social media and online platforms to connect with consumers, build brand awareness, and drive demand for accessible luxury items.

• Consider Offering a Range of Price Points: Providing options across different price brackets can cater to a wider consumer base while maintaining brand integrity.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it. In 2025, the overarching trend of Conscious Luxury Consumption signifies a pivotal shift where consumers are prioritizing value and accessible quality over ultra-luxury extravagance, necessitating that brands strategically focus on transparently communicating the worth of their offerings and adapting their price points and marketing efforts to meet these evolving demands in an economically sensitive global market.

Final Note:

• Core Trend: Conscious Luxury Consumption: Consumers are making more mindful and value-driven purchasing decisions in the luxury market.

• Core Strategy: Value-Centric Brand Messaging: Brands need to clearly communicate the quality, craftsmanship, and value proposition of their products.

• Core Industry Trend: Tiered Performance in Luxury Goods: The luxury market is seeing a divergence in performance, with mid-tier brands outperforming ultra-luxury and fast fashion.

• Core Consumer Motivation: Seeking Quality and Value at an Accessible Price: Consumers want luxury goods that offer a strong balance of quality, design, and price.

Final Conclusion: The current landscape of the luxury goods market clearly indicates a growing preference for accessible luxury, driven by economic factors and a more discerning consumer base. Brands that recognize and cater to this shift by emphasizing value, quality, and relatable aspiration are poised for success, while those that fail to adapt risk losing ground in this evolving market. The performance disparities highlighted in the article serve as a crucial indicator of the changing dynamics within the luxury retail sector.

Core Trend Detailed: Conscious Luxury Consumption is a significant evolution in how consumers approach the purchase of high-end goods. It moves beyond simply buying for status or brand name recognition and involves a more thoughtful evaluation of what constitutes true value in a luxury item. This includes assessing the quality of materials, the craftsmanship involved, the design and aesthetic appeal, and the overall price relative to these factors. Consumers engaging in conscious luxury consumption are often seeking items that offer a sense of indulgence and aspiration but are also perceived as a sensible investment rather than an extravagant or frivolous purchase, particularly in times of economic uncertainty.

Key Characteristics of the Core trend:

• Emphasis on Price-to-Value Ratio: Consumers are actively weighing the cost of a luxury item against its perceived quality and worth.

• Preference for Accessible Luxury Brands: Mid-tier brands that offer a balance of quality and price are gaining popularity.

• Questioning Ultra-High Markups: Consumers are becoming more skeptical of the extreme pricing strategies of some ultra-luxury brands.

• Potential Shift Away from Fast Fashion for Some: A desire for more enduring quality may lead some consumers to opt for more considered luxury purchases over frequent fast-fashion buys.

Market and Cultural Signals Supporting the Trend:

• Strong Performance of Mid-Tier Luxury Brands: The financial success and increased forecasts of brands like Coach, Ralph Lauren, and others demonstrate consumer demand in this segment.

• Weaker Sales of Some Ultra-Luxury Brands: The reported challenges faced by LVMH, Gucci, and Hermès suggest a potential softening in demand for the very high end of the market.

• Struggles in the Fast Fashion Sector: Slower growth and missed targets for retailers like Zara and H&M indicate a possible consumer shift in priorities.

• Economic Uncertainty and Inflation: Global economic conditions are likely making consumers more cautious about discretionary spending.

• Increased Consumer Awareness and Information: The internet and social media provide consumers with more information to compare brands and assess value.

How the Trend Is Changing Consumer Behavior:

• More Discerning Purchasing Decisions: Consumers are likely to spend more time researching and comparing luxury goods before making a purchase.

• Trading Down from Ultra-Luxury: Some consumers who previously bought exclusively from high-end labels may now be considering more accessible luxury options.

• Seeking Longevity and Quality: There might be a greater focus on purchasing items that are well-made and will last, rather than being solely driven by fleeting trends.

• Increased Scrutiny of Brand Pricing: Consumers may be more vocal and critical of brands whose pricing they perceive as unjustified.

Implications Across the Ecosystem:

• For Brands and CPGs: Need to align product development and marketing strategies with the principles of value-driven luxury.

• For Retailers: Should curate their luxury offerings to reflect the growing demand for mid-tier brands and potentially offer more transparent pricing information.

• For Consumers: Will likely benefit from a wider range of quality luxury goods at more accessible price points, but need to remain informed and discerning.

Strategic Forecast:

• Continued Dominance of Value-Focused Luxury: The trend of conscious luxury consumption is expected to persist in the near future.

• Potential for Price Adjustments in Ultra-Luxury: Some ultra-luxury brands might face pressure to become more competitive in their pricing.

• Greater Emphasis on Sustainability and Ethics: Conscious consumption often extends beyond price and quality to include ethical and environmental considerations.

• Evolution of the Retail Experience: Luxury retailers may need to adapt their in-store and online experiences to better cater to value-conscious consumers.

Final Thought: The rise of conscious luxury consumption signals a maturing and more discerning consumer base within the luxury goods market. No longer solely driven by status or brand name, these consumers are seeking a tangible return on their investment in terms of quality, design, and overall value. Brands that can effectively meet these evolving expectations are best positioned for success in the years to come.

Source: https://www.bloomberg.com/news/articles/2025-06-01/coach-s-hit-handbag-shows-how-less-expensive-luxury-is-gaining-ground?embedded-checkout=true