As much as luxury apparel brands are mapping out their omnichannel future to tap into changing demographic trends and more brand-engaged consumers, there’s one big blind spot that needs to be addressed.
“By [2025], Millennial & Gen-Z Will Dominate the Luxury Market with >70% Share,” stated an investor presentation last week from Tapestry, the holding company that owns the Coach, Kate Spade and Stuart Weitzman brands, while outlining what it sees as the steps needed to grow its sales to $8 billion for the fiscal year ending in July 2025.
Plans revolve around the changing styles and increasing buying power of millennials and Gen Z customers, with Tapestry coining the term “expressive luxury” to describe the new direction for Coach. It’s a departure from the brand’s “affordable luxury” market positioning of recent years and centers on an omnichannel approach to keeping its two prime demographics engaged in coming years.
Tapestry CEO Joanne Crevoiserat told Vogue Business on Friday (Sept. 9) that “Soon, Gen Z and millennial shoppers will represent the majority of the luxury market, and they will continue to influence the interests of older generations as well. Expressive luxury represents our vision of this future as well as our heritage, and is core to the accelerated growth strategy we’ve defined for Coach.”
Coach is set to get the biggest push in the portfolio, slated to grow to $5.7 billion in sales with within three years, with roughly three-quarters of sales currently direct to consumer. The omnichannel push is seen as central to successful growth coming out of this period.
In an interview with PYMNTS’ Karen Webster, XY Retail CEO Susan Jeffers said, “Retail might change tomorrow. It may not be that I walk out of the store with a bag. I might have everything delivered and it’s more of an Apple Store concept where I’m showrooming. At that point, I just need to have a digital plus a physical experience where I can experience the products that the brand has to offer.”
See also: Luxe Retailers Look to Connect Payments, Data — and High-Touch Service
Luxury Transformation on the 3-Year Plan
For a wider three-year roadmap set out for the three iconic brands, Tapestry’s plan calls for building on its work in consumer-centricity and brand building. This is taking the form of driving customer lifetime value by increasing acquisition, retention and reactivation strategies, according to a statement, and focusing on “sustained growth in core handbags and small leathergoods, while accelerating gains in footwear and lifestyle products.”
Crevoiserat added that Tapestry has “radically transformed our company, with a sharpened focus on the consumer and commitment to brand building, delivering standout results. From this strong foundation, we have tremendous runway and are poised to drive continued growth across each of our iconic brands. The environment is ever-changing, and we are ready to move at the speed of the consumer with agility and intention.”
Social influence is clearly reflected in the choice of Kim Kardashian as the new face — or foot, as it were — of the Stuart Weitzman footwear brand. Crevoiserat told Yahoo Finance, “We’re building momentum behind the brand and amping up the heat,” with its product and omnichannel focus fueled now by adding Kardashian’s draw to the marketing mix.
Luxury has proven largely resilient despite economic headwinds, despite the fact that consumers generally see the current inflation storm lasting for some time.
According to PYMNTS’ latest “Consumer Inflation Sentiment Report: Inflation Slowly Ebbs, But Consumer Outlook Remains Gloomy,” “The average consumer expects inflation to continue at its current rate for more than 22 months into the future. Consumers living paycheck to paycheck with issues paying bills are the most pessimistic, with 28% saying they believe inflation will continue at its current rate for longer than two years.”
See it now: Consumer Inflation Sentiment: Inflation Slowly Ebbs, But Consumer Outlook Remains Gloomy
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