Even before the economy went south, women were weary of “It” bags. It seemed like each month, some website or publication was proclaiming a new one that had instant cachet, a waiting list, and a price to match. So it wasn’t difficult for many women to resist the siren call of new “it” bags but still, we do like to change things up now and then. Who would hear our silent plea for affordable bags? Apparently, Coach.
In a recent Business Week article about the company, CEO Lew Frankfort details the research they did to forecast not only the recession but that high prices would soon go the way of the dodo. Bravo, Mr. Frankfort. It isn’t every day that companies pay attention to their customers’ buying habits and here’s one that not only listened, it acted.
Coach remade their business model so that they could source less expensive materials. They took a slightly lower profit margin (which is still laudably high) yet continued to design attractive, functional, and now relatively affordable bags. Their new “Poppy” line, due in late June, includes bags that will retail for less than $200 each. They tested very well in nine Coach stores and online through Facebook. That last bit of marketing was a first for the company and was another savvy move.
I’ve recently written about the difficulties faced by companies that ignore current market conditions, so it’s refreshing to see a company face them head-on. It’s even better to hear about a company that didn’t sacrifice brand equity doing it. Coach customers will remain loyal and more importantly, they’ll gain new customers. That’s a certainty. It’s as they say, “in the bag”.
