Transformation Of Coach: Breaking The Logic Of Luxury

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According to the requirements of the headquarters, we will adjust the placement of products and match the accessories with new handbags, such as scarves, wallets, and even the music in the store.

In 2001, Coach's design team launched the double C printing with the logo of the first letter C as the logo, and used the bright color as the double C printing. It made the consumers feel that Coach is no longer a dull brand which will only produce the "mother bag" brand.

Since then, the handbag Signature series, known as the Coach logo, has become the most popular design of Coach, and its sales have remained high, occupying 60% of its total turnover.

In 2000, the new Coach was listed on the NYSE, and Coach began to launch more fashion accessories products, including shoes, belts and sunglasses. This also meant that Coach was pformed from a leather bag manufacturing company to a fashion dealer.

Coach has always maintained the highest quality, durable and strong enough to become a luxury brand. But compared with the traditional luxury brands in Europe, the average selling price of Coach is less than half of that.

With the unique insight of consumers, Coach has cut the new consumption trend that is popular in the consumption upgrading. Therefore, Coach has put forward a distinct and impressive brand positioning: "luxury goods at hand".

Michael, marketing expert of Boston consulting company.

Silver Stan, after a global consumer survey, found that traditional market segmentation indicators such as purchasing power, risk awareness, culture and lifestyle habits, it is difficult to clearly describe consumer preferences.

Because more and more consumers are willing to spend more money on certain products in exchange for better products or services, they are also willing to be frugal in some ways so as to save money and buy more high-end products in other categories.

Fashion products are one of the categories that are becoming more expensive. More and more women prefer to spend more money on expensive and expensive handbags.

Under the trend of polarization of consumption, luxury consumption is no longer the prerogative of the top rich.

Despite the fact that European luxury brands carry out brand positioning with high prices all over the world, low prices have not only made Coach's high-end brand image dull, but instead become a competitive advantage of Coach.

For those who have both luxury consumption and not much disposable income, Coach just cut their demand for consumption upgrading, which makes Coach attract more consumers.

In the US market, European luxury brands such as LV lock on the top 3% of household income, while Coach can extend the scope of potential customers to the top 20% of households.

In Japan, where luxury consumption is strong, Coach is known as the "brand entry kit" or "the first brand package".

That's precisely how the emerging market with a strong demand, coupled with a competitive business model, has enabled Coach to rise from $500 million to $3 billion 200 million in 2000.

Moreover, even under the impact of the economic crisis of 2008, the gross profit margin of the brand is reduced, and it can still become one of the most profitable brands in the global luxury industry.

Along with the changing trend of consumers, Coach not only cleverly positioned itself in a growing market space, but also dared to challenge the seemingly Unbreakable Rules in the luxury industry, forming its own unique brand operation rules.

In the fashion industry that has always attached importance to the replacement of new products, the new products will be introduced every quarter to define the prevailing trend of the season. This is a common practice.

But this speed is still too slow for Coach.

After statistics, Coach found that those old customers would visit Coach stores once in about 30 days.

In order for them to have a surprise every time they return to the store, they can see fresh products and stimulate their desire to buy. Coach speeds up the update of new products.

In Frankfurt's view, the monthly delivery rate of new products is precisely in line with the pace of life of consumers.

In this way, the new products launched in the month will always be placed in the most important position of Coach stores, so that each passing consumer can be attracted immediately.

Moreover, as long as the season is over, products will no longer be sold.

Compared to a European luxury brand that has been selling for a year in a handbag, Coach is "hard to recover" once it is missed, which is often an important reason for persuading them to buy.

Moreover, in order to persuade consumers to buy more products, Coach positioned the handbag as "twenty-first Century shoes".

According to the survey, American women buy 6-8 pairs of shoes each year to match different clothes and occasions, but generally only two handbags.

So Coach became the first luxury brand to bring different handbags on different occasions and seasons.

Later, Coach constantly introduced new products, and defined many new types of handbags, such as weekend bags, travel bags, banquet bags, short holiday packages, wrist bags and so on.

One of the wrist bags has set a record of 100 thousand sales, which has opened up the market for young women.

Coach not only dare to challenge the rules of the industry at the speed of popularity, but also define the speed of shipping that is closer to consumer habits. In terms of channel strategy, Coach also challenges the most sensitive nerve in the industry, and forms a unique channel structure.

The location of Coach's direct store is very harsh. It must have a traffic flow of over 1 million and a high visibility street corner, and the storefront area should be over 150 square meters.

It always chooses to gather in the European specialty stores, so as to share the passenger flow of these top brands. On the other hand, it is also easy to shape the impression of Coach on the same level with these European luxury brands in the minds of consumers.

For example, in Japan, Coach stores are always located next door to the top luxury LV, and Coach's expansion is basically following LV, appearing next to every LV store.

Similarly, the flagship store opened recently in Nanjing Road, Shanghai, is also located at the intersection of two busy streets, opposite to LV and the upcoming Hermes.

In order to enable consumers to get access, Coach does not stick to the central business district of luxury brands, but develops different channel strategies according to different consumers.

In recent years, Coach has opened flagship stores in busy commercial centers of various cities on the one hand, and has also expanded its brand discount stores in a big way.

Many luxury brands are worried that discount stores will damage the brand image. Coach is so bold in "killing each other" because Coach finds that customers in the two channels are quite different in the consumer survey: the urban franchised stores are unmarried or newly married women under the age of 35, who are fond of fashionable dress and are willing to spend more money for handbags. Most of the consumers in the discount stores are married women who are over 45 years old. They only want to buy a handbag with superior cost performance at a lower price and serve as the basic accessories for the workplace.

What's more, in order not to damage the image of Coach, the products sold in discount stores are not sold in the exclusive stores. They are specially designed for discount stores or some old styles, so that different product lines can be flaged in different channels, which will not cause conflict among channels, but will contribute to the Coach's huge cash flow.

Traditionally,