Coach Reports Revenues Up 15% — So What Does That Mean for Your Business?

Some say this signals the return of the luxury market, but it only shows Coach’s understanding of a challenging retail market

 

Luxury handbag maker Coach has recently released news that its sales increased over the holidays, driving an overall second quarter revenue increase of some 15 percent. Revenues in stores open at least one year increased 8.8 percent in the quarter ending in December, causing speculation that the luxury goods sector may be rebounding in spite of an overall weak economy.

 

Indeed, this is great news for Coach. But it is dangerous to conclude from this news that the luxury market is back and things will be better for all in the coming quarters. Rather the message is that Coach is becoming a stronger, more formidable competitor.  They have taken the right steps to grow business in the current challenging retail environment. What other luxury marketers should learn from Coach is how to use the power of consumer insights to tailor solutions for their own customer base.

  

Get Inspired>>  

 

 Coach’s results only tell you about Coach — You need to get up close and personal with your own customers to find strategies that will produce Coach-like results for your business   

 

Coach is successful because it understands its own brand and its own consumer.  Other luxury marketers can’t replicate what Coach has done, because Coach’s solutions will only work for that company.  Rather, luxury marketers must learn first-hand — not second-hand — about the luxury consumer, who they are, and how to market successfully to their new value-driven mindset and changed needs. 

 

Coach understand that the recession brought out the value consumer in all of us, regardless of income level, so it launched its Poppy line in 2009.  This line of handbags offered a price point about 20 percent lower than the overall Coach average.  They also committed to offering half of their bags under the $300 price point.

  

In addition to rebalancing their prices, Coach took a hard look at how their customers shop.  They realized that the typical Coach customer visits a Coach store once a month, so they committed to change the store floor layout and introduce new products on a thirty day cycle.  This decision was not driven by a look at what other companies were doing but by their own market research. 

 

Take Action>> 

 

Marketers need to do their due-diligence to understand their customers better in order to drive sales in a challenging market environment

 

Coach is successful because it understands its own brand and its own consumer.  Other luxury marketers can’t replicate what Coach has done, because Coach’s solutions will only work for that company.  Rather, luxury marketers must learn first-hand – not second-hand – about the luxury consumer, who they are, and how to market successfully to their new value-driven mindset and needs.

If you want to do with your business what Coach has done, your first step is easy.  Pick up my new book, Putting the Luxe Back in Luxury, for a look at the new luxury consumer, who they are, what they want, and why they buy.  Then, when you are ready to take the next step into understanding your specific consumer, call me for custom solutions to your needs.

Today’s luxury consumer is looking to maximize their investment when they spend, hoping to get the biggest return on their purchase investment.  Coach bags give them that with classic design, high quality leather, and a standout guarantee, plus a shopping experience that they favor. 

But other luxury marketers can gain inspiration from Coach, but then they need to find new approaches, new strategies, new ways to build their businesses.  Just like a handbag, a marketing solution is a highly individual thing, and you can’t borrow someone else’s.  You need the one that works for you.

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