Death of the IT bag: sales of handbags fall 20 percent

A desire to buy the latest handbag every season is no longer a priority for shoppers.

In the US the handbag business has fallen by 20 percent over the first eight months in 2019 compared to 2016, according to research data analytics firm NPD Group.

This is no coincidence as the status IT bag no longer carries the same cachet as it once did. A shift in consumer sentiment and spending habits is driving a new dawn of experiential retail, and luxury brands will need to dive deep into the challenges and how to drive sales in the current market.

The Baguette, Paddington and Saddle bag

The bag craze was a consumer phenomenon when the sight of Fendi’s Baguette, Chloe’s Paddington, the Balenciaga Motorcycle bag or Dior’s Saddle bag could turn envious heads anywhere one went. It began in the late nineties when having a luxury handbag was the epitome of status and when a recognizable design could command a symbolic IT status. But as more and more designs entered the market, so too did the end of season sales and owning a beautiful accessory was no longer just for the privileged few. Soon enough luxury handbags became ubiquitous and prompted a new generation or non-descript accessories, like the Celine tote or icons like the Hermes Birkin or Chanel 2.55, which never went out of style.

Form and function, more than a bag

According to NPD, consumers are looking for more than just a bag, they are looking for solutions. Purchasing comes with high expectations, from function and versatility to a brand’s engagement in the social and environmental issues that matter to them, and the luxury market is not immune to these pressures. Spending has diverted to convenience, entertainment, wellness, travel and experiential products. The new fashion status symbols, according to NPD, are active apparel and footwear.

Customers are also willing to spend on unknown labels they have not encountered before, instead of investing in the obvious icons. This is one of the reasons direct-to-consumer brands are thriving and have been able to keep costs lower than traditional retail brands.

The notion of simmering impulses to own the latest luxury bag is supported by NPD’s pricing research in the era of tariffs. Their study deemed handbags to be a “high-impact” category, at risk for additional sales declines as a result of tariffs – consumers consider handbags a “nice-to-have” category and not a “must-have” category.

Never be seen with a bag

Former French Vogue editor and stylist Carine Roitfeld set the trend when she was perenially photographed at fashion week without ever carrying a handbag, simply because she prefers keep her hands in her pockets rather than be burdened by a leather holdall under her arm.

On the runway, Comme des Garcons designer Rei Kawakubo is one of those rare designers who never shows a handbag at her fashion shows. Every season her storytelling embraces the conceptual rather than economical, and you never get the feeling she is trying to sell her audience the latest accessory.

At the height of the IT bag phenomenon, every boutique and department store carried the same collection of branded handbags. Perhaps the customer simply lost the impulse to buy them.

Image source: Gucci Facebook