If Europe is the birthplace of traditional luxury, then the United States is the base of "light luxury". Some collections, including Michael Kors, Tory Burch, Kate Spade and Coach and Ralph Lauren, can be defined as "Affordable Luxury". In addition to originating from the United States, they also have prices that are Between 150-1500 US dollars, and have multiples in common such as up and down 6-8.
When it comes to the rise of light luxury in the United States, we have to mention the history of the fortune of "the originator of light luxury" Coach. Founded in 1941, Coach was first known for its sturdy handbags made of cowhide. In the late 1990s, then-executive chairman Lew Frankfort embarked on a drastic brand makeover and first proposed the concept of "affordable luxury" at low prices. The strategy attracts huge foot traffic. At the beginning of 2000, the mid-end consumer market in the United States was on the rise, and the new middle class was willing to pay a premium of 20%-200% for better designed products. The repositioned Coach is aimed at the market vacancy between "old luxury" and mass brands, bringing consumers products that can be mass-produced, combined with high-quality service and spiritual enjoyment.
Coach's "luxury strategy" inspired a group of "American fashion upstarts". Michael Kors, who is famous for the celebrity vacation style, used to be inseparable from Coach in store design, discount cycle, product category, and store location. Even if there are many similarities in products, it will not affect the birth and rise of more brands under the trend of light luxury.
In 2008, Coach, which was a big success in the US business world, increased its investment in overseas markets and introduced the concept of "affordable luxury" to China for the first time. At that time, the Chinese industry generally believed that Coach's self-proclaimed positioning was just a hype full of gimmicks. However, people soon realized that Coach had indeed tapped a huge potential and untapped blue ocean market.
Not long after Coach entered China, it was a "good time". The first batch of the post-90s generation officially entered the workplace, and the post-80s generation became the main consumer of high-end brands. According to McKinsey's report "Winning The Battle of China's New Middle Class", in the 2010s, the rising Chinese new middle class accounted for 68% of urban households. People are no longer satisfied with having "ordinary brands", but have begun to pursue the replacement of luxury goods with original design, excellent quality, and "cost-effective".
VAt that time, China's fashion market was not yet subdivided. American light luxury brands were known for their superb marketing methods. When they first entered the Chinese market, they brought consumers a feeling of luxury. According to the dictation, at that time, it was possible to buy a Michael Kors of the same style as a Hollywood star, which was considered a "big deal" for an uninitiated workplace novice.
Almost at the same time, another New York brand Tory Burch with the label of "light luxury" entered the Chinese market in 2011. Founder Tory Burch stated in an interview: "Everyone is talking about China (the market), but I enjoy the slow way of dealing with it. I personally have feelings for Asia, so I will think carefully and slow down." Even so, three years later, Tory Burch's world's largest brand flagship store was completed in the Kerry Center in Jing'an Temple, Shanghai, and Tory Burch personally participated in the opening ribbon-cutting. It was also in this year that the fashionable girl Nan Xiang played by actress Guo Biting in "Little Times 3" carried the Tory Burch 2014 spring and summer new style on her back and appeared on the movie poster, witnessing the highlight moment of the brand and even "light luxury".
The plan could not keep up with the changes. It seems that overnight, the "light luxury fever" encountered a Waterloo-style cooling in China. In fact, there are early signs that the low-price strategy starting from Coach has continuously consumed brand reputation, making innovation and design less important in this company. According to online data, in 2013, more than 70% of Coach products were priced below $400, and outlet sales accounted for two-thirds of the total in North America—this is just the tip of the iceberg of the challenges faced by affordable luxury.
Even without its many problems, luxury goods that are struggling to cater to the younger generation are gradually competing for the "high cost-effective" category cake. According to the "2017 China Luxury Online Consumption White Paper", after 2016, the millennial generation has become the main force of China's luxury goods consumption. With the rise of niche styles and trendy culture, luxury goods have launched more items under 5,000 yuan, and the cross-border joint name with Louis Vuitton x Supreme as an example has attracted the attention of young people. At the same time, doing homework online and buying offline have become a trend. Luxury brands have joined the localization army and launched their own WeChat mini-programs to immerse themselves in the "hand-held life" of young people with a more approachable attitude.
Furthermore, the consumption concept of Chinese young people has also changed - they are returning to their "self" from "grouping". Even if they can't buy tens of thousands of luxury goods for the time being, they are no longer excited for the "replacement" of several thousand yuan. The new generation with more individuality directly skips the light luxury adhering to the "moderate way", and chooses independent designer brands with more out-of-the-box styles and less "collision".
Faced with similar development bottlenecks, American light luxury brands are no longer willing to be "luxury replacements", and they have all turned to the road of transformation, led by Coach and Michael Kors, trying to expand their brand lines through acquisitions and transform from a single-brand specialty retailer A coveted multi-brand fashion group with a high emotional connection.
In October 2017, Coach Group announced that it would change its name to Tapestry Group, which became the big news in the fashion industry this year. Company CEO Victor Luis said that Coach's positioning will change from "affordable luxury" to "modern luxury brand". In addition to the upgrading and transformation of the same name brand, Tapestry Group has successively acquired the young and playful Kate Spade and famous shoes. Brand Stuart Weitzman, trying to reshape the high-end positioning, get rid of the constraints brought by the comfort zone of low price.
As Stefano Tonchi, editor of the US edition of W Magazine, said: "People see Coach now, and they don't think of a handbag, they think of an entire wardrobe." Jimmy Choo is brought under his command and renamed Capri Group. So far, the brand contest between the two rivals has turned into a competition for "the first American fashion group".
Time is the best touchstone. Tapestry Group's annual financial report shows that the Coach brand's sales in the Chinese mainland market in the third fiscal quarter of 2021 increased by about 175% compared with the same period in 2020, and also increased by 40% compared with the same period in 2019. In addition to the positive effect of the reform, the marketing innovation of increasingly youthful, localized, community-based and digitalized marketing is also an important factor to turn the tide against the wind. The artist-limited series of Yeti Out cooperation is enough to glimpse Coach's determination to move closer to the new generation in China.
In addition, more than one business report shows that American "light luxury" brands will not end in the short term in China. McKinsey predicts that by 2025, Chinese consumers will spend 1.4 trillion yuan on luxury goods (including heavy and light luxury), accounting for 44% of global luxury consumption, of which the historical growth rate of "light luxury" consumption exceeds Heavy luxury consumption will reach 620 billion yuan, of which second- and third-tier cities will also become the "battlefields" for "light luxury" to focus on in the future.