|
|
Coping with market oversaturation
As with the fragrance industry, oversaturation now plagues the handbag marketplace, say some panelists. “The life of new product is reduced to half of its peak selling period because of the overabundance of new products launched and competing for the consumer’s attention,” asserts Cohen. “Channel blurring” is another obstacle; as an example, he cites handbags that are similar in design, but lower-priced and widely available. Such conditions blur perceived value, causing aspirational customers in particular to “slow down their trading up.”
This blurring phenomenon is likely to continue in 2008, given the growth of that new industry buzzword, “bifurcation” (i.e., polarization of pricepoints). Federated, for example, has moved many of its pricepoints upward—and subsequently, in Feller’s opinion, may be in danger of isolating its more moderate customers. Yet at the same time, the moderate market benefits from private label brands.
With so many choices today, consumers now look to their favorite lifestyle brands to serve as filters, says Jillian Hertzman of The Intelligence Group. “If they love Urban Outfitters for everything from apparel to home décor, they’ll also trust Urban Outfitters to sell them the right handbags and accessories.” She reserves her highest praise for Coach and its straightforward formula: “Coach offers quality, authenticity and stylistic variety, but nothing too trendy or ‘out there.’ That makes sense to consumers.”
|
