Responding to dismal sales figures, Marshal Cohen, chief analyst at NPD, talks about what went wrong and what’s going right in the accessories industry.
by Jeff Prine
Several years ago, on one of his hundreds of jaunts around the country to talk with retailers about what consumers are shopping for, Marshal Cohen, the NPD Group Inc.’s chief industry analyst, was busy explaining why handbag business had to change.
One, he explained, was the fact that the athleisure trend was pushing consumers away from traditional, structured handbag silhouettes such as satchels, top handles etc. into more casual offerings. Two, once considered a back-to-school item for kids, Cohen predicted the backpack would surge in popularity at all pricepoints replacing the coveted “it” bags. Three, social media would be so pervasive that Facebook, Instagram and Twitter would be driving sales and even pushing actual sales directly to consumers. And four, that Baby Boomers, whose tastes and purse strings helped define 50 years of retailing, would fade from the scene.
“They just looked at me as if I had three heads,” recalls Cohen, startled by the chilly reception his forecast had.
Now the big chill can be found in sales of accessories where major categories such as handbags and jewelry are seeing year-after-year drops in sale. It’s not all doom and gloom though; there are categories that are doing quite well, thank you very much. Case in point: slippers, which Millennials have adopted as casual, inexpensive streetwear, and personal accessories which have been resurrected thanks to the insatiable consumer thirst for the latest technical devices that need covers and hands-free means to carry them.
Remember the “lady who lunches,” the Baby Boomer character in the Broadway show “Company” who plaintively asks, “Does anyone still wear a hat?” Well, we’ll drink to the fact that a new generation has developed a certain fascination with headwear, not so much as sun protection but as to create an identity modeled off their favorite pop idols and singers.
Trouble is, those categories are dwarfed in size by the hard-hit categories. “Slippers aren’t even near to being a $1 billion business. The same with other fashion accessories categories that have benefitted from worsening cold weather. Even double digit sales increases cannot erase falling sales in the major categories.”
Ironically, one category that has done exceptionally well is nearly alienated from accessories: luggage. A natural extension of handbags and leather goods, luggage is undergoing a boom as travel for pleasure and business is on the rise. “Too many times luggage was moved off main floor and over by housewares,” says Cohen. “Well, luggage business has surged and, coincidentally, so have housewares. Again the consumer is being lured away from traditional accessories main floor businesses and it’s not just online either.”
Resting on Laurels
“Frankly, it’s a bad position to be in. Traditional brands are now having to play catch up to address an accessories shopping experience unlike any seen before. I’d been saying ‘you better wake up.’ Well they did, but they woke up too late.” Cohen says. So many retailers and manufacturers are steeped in traditional roles that they totally missed seminal changes that now have come to roost at retail. “In many cases, the leadership role in fashion are being assumed by companies outside the accessories arenas.”
“Traditional brands are now having to play catch up to address an accessories shopping experience unlike any seen before.”
Moreover, it’s more than a matter of playing catch up to these ever-changing trends. The very notion of what accessories are has changed. “For the new generation of shoppers, their first proprieties are technology, social media and experiential events such as concerts, travel, entertaining with friends. Much lower down on the list is finding the latest trend in apparel and accessories,” Cohen says. Accessories to these new consumers is more about the latest app, mobile device, chargers, or even gadgets and appliances for their homes. That’s where they are investing money—not in building wardrobes.”
Interest now is focused on the experiential which Cohen says is resulting in a boon for housewares, cooking, travel etc. And interest in these has more to do with researching, checking out social media critiques, following Spotify, Apple and subscribing boxes where a stylist chooses accessories.
“The impulsive side of shopping isn’t as important. Impulse shopping isn’t disappearing it’s just become much less important to consumers,” Cohen says. The same things have happened with traditional brands and designers who once ruled accessories. “They don’t care about brands as much as they used to. Quality, durability and function trumps the brand platform. They’re more driven by whether its iOS or analog.”
Upstart brands, many borne out of online sales and social media, are gaining market share as most sell direct to consumers, Cohen adds.
Couple these factors with Baby Boomers pulling back on their own discretionary spending in favor of experiences, too, and you have a convergence of issues that explain what ails the accessories business.
Standing Out from the Crowd
The challenge now is not to follow but to look for the next big trend. Fortunately, there are some bright spots amid this paradigm shifts. This entails changing models, adding or subtracting merchandise, and addressing head on major lifestyle changes.
Among the companies that Cohen cites as having reinterpreted for this new generation include Lululemon, Tapestry (Coach), Tumi, Vera Bradley among others.
“Lululemon has become such a force among sports brands that it is to be reckoned with in accessories. Neiman Marcus has stepped up with what it means to be luxury these days with more exclusives. Bloomingdale’s had gone for more proprietary merchandise as well. Target has shown that it is possible to sell leading fashion at a popular price, even mixing high and low successfully. Tapestry has shown it can stand out from the crowd, too. Tumi has used its leverage in luggage to expand the brand as a travelgoods source.”
Cohen points to one area where in-store experience is actually increasing: shops, pop ups inside airports, train stations etc. It’s not that these outlets do such gangbuster business of an A door, but they directly expose brands such as Coach and Vera Bradley, to the traveling consumer, giving them a quick hit of the lifestyle, newness and, most important, keeps them in front of them. “They’ve been a successful form of advertising.”
Most of all, Cohen believes one of the traps would be to continue to think of accessories business in its traditional, historical definitions. “Accessories are constantly being redefined by consumers, whether you talking gaming, cooking, entertainment, traveling. The old mindset just isn’t there anymore. Accessories aren’t just defined by fashion. The faster the industry adjusts to this mindset, then the faster their sales are going to go up again.”
About Marshal Cohen: A nationally known expert on the retail industry and consumer behavior, Marshal Cohen, chief industry analyst at NPD Group Inc., has followed retail trends for more than thirty years, both at NPD and as the head of leading retailers, as well as fashion and apparel companies. Marshal is also the author of two books, Why Customers Do What They Do and more recently Buy Me! New Ways to Get Customers to Choose Your Product and Ignore the Rest. In addition to his duties at NPD, Marshal is a guest professor at North Carolina State University, School of Textiles. He is introducing students and faculty to techniques for analyzing and applying data. Marshal has also been a guest lecturer at Savannah College of Art and Design, the Fashion Institute of Technology – Fashion Marketing and Merchandising, and the Wharton School of Business – Jay H. Baker Retailing Initiative.