Consumers may be spending more on technology and experience-related purchases but millennials are willing to spend big on “it” bags. According to a new study from the NPD Group, a New York-based market information and advisory services firm, women aged 18 and older spent a total of $11.5 billion on handbags in the U.S. in 2015 alone. Most of that growth comes directly from Baby Boomers (women who are between 52 and 70 years old in 2016), as opposed to Millennials (those between 18 and 34 years old), who made up for only 2 percent of the rise in spending on handbags.
So, what are consumers looking for in a bag, you ask? Rohan Deuskar, chief executive officer and founder of Stylitics, the fashion tech and consumer insights company with which the NPD Group partnered to produce the report, said: “The Millennial customer is shopping for handbags very differently than other generations. This customer starts with specific product attributes, not brand, when looking for her next handbag, and invests more time and research in her purchase than brands and retailers realize. These findings have been eye-opening for handbag sellers, and are having an immediate impact on their marketing, merchandising and product development strategies.”
That is not all we know, though. According to Marshal Cohen, the NPD Group's chief industry analyst, Millennials begin scouting their handbag purchases more than a month in advance. Roughly 61% of them begin by browsing online first settling on a final purchase. So, there is not too much impulse buying occurring here. Cohen elaborated, saying: "The handbag has become a signature item, and retailers need to take advantage of selling it in-store, up-front and center, as their own signature.”
Regardless of the size of a fashion brand, handbags and other accessories serve an integral function. For small labels, they act as important brand building tools. Just ask Jack McCollough and Lazaro Hernandez, the design duo behind Proenza Schouler, who praise their first “it” bag, the PS1, as helping them to make their name in fashion and particularly, among consumers. For larger houses, like the Chanels, Guccis, and Louis Vuittons of the world, more accessibly priced items, such as handbags and licensed goods, serve as a significant source of income, particularly given the fact that most runway garments do not sell at all and if they do, they are only sold in very small volumes. With this in mind, bags are arguably the key to success for most brands and are a key focus point for brands and consumers, alike.
So, what bags are consumers lusting after? Well, according to NPD, one-third of the handbags purchased in the U.S. over the past year ending in June did not have a visible logo. It seems older women are leading the way to discreet luxury handbags. Sales of purses without a big logo splashed across it are highest among women age 50 and above. Younger women in the Gen Z category increased their purchases of these no logo bags by 8 share points and Gen X’s sales rose, but by a lesser amount.
“Consumers are becoming less focused on image and more focused on individuality – especially the younger generations,” said Marshal Cohen, the chief industry analyst at The NPD Group. “While the cachet of designer logos is still relevant for many, the days of consumers looking to be a part of a designer or brand movement are waning in favor of their desire to find the style and function unique to their personality and lifestyle.”