Coach  Inc.  –  91007  –  Market  Trend  Analysis  

Area  of  Investigation  

%   Opportunities  Description  

%     Threat  Reasons  Description  

Coach  –  91007    Economic  

1.0%   Coach  consumers  of  aspirational  brands  (low-­‐mid  net  worth)  were  severely  impacted  by  the  decrease  in  personal  cash  flow  and  have  significantly  modified  their  purchasing  behaviors.  However,  the  high-­‐net-­‐worth  individuals,  although  impacted,  still  have  the  disposable  income  to  purchase  luxury  goods.  

0.5%   One  of  the  largest  threats  to  Coach’s  sales  is  the  current  financial  crisis,  which  has  lead  consumers  to  scale  back  on  their  non-­‐entry  level  handbag  purchases.  Consumers  are  becoming  more  hesitant  to  purchase  handbags  at  full  price  and  opting  to  wait  for  a  sale.  In  addition,  ostentatious  handbags  are  becoming  less  popular  and  are  being  replaced  with  more  classic  and  traditional  handbags.  Finally,  customers  are  now  considering  handbags  as  an  investment  because  of  the  repeated  use.  

Coach  –  91007    Sales  Trends  

2.0%   In  addition  to  regularly  scheduled  sales  events,  many  luxury  retailers  are  offering  “whisper”  sales.  These  sales  are  either  conveyed  to  the  consumer  

0.25%   According  to  NRF  (National  Retail  Federation)  retailers  won’t  be  doing  business  as  usual.  Markdowns  (and  the  corresponding  

while  shopping  at  a  retail  location  and/or  via  email  to  select  costumers.  Retailers  are  using  these  tactics  to  incentivize  the  consumer  while  trying  to  minimize  any  brand  degradation.  

inventory  levels  from  which  they  result),  it  will  continue  to  have  the  most  significant  impact  on  margins,  regardless  of  the  merchandise  issues  that  have  also  been  a  factor.  

Coach  –  91007    Online  Shopping  

1.5%   Online  handbag  sales  have  shown  a  growth  greater  than  the  retail  sector,  influencing  the  majority  of  retail  outlets  increasing  their  online  presence.  Some  industry  experts  claim  that  some  retail  outlets  will  act  solely  as  a  “showroom”  where  the  majority  of  sales  will  come  from  online  purchases.  

0.75%   Possibility  of  increasing  CRM  (Customer  Relationship  Management)  to  engage  and  connect  the  customer  with  the  brand.                

Coach  –  91007    Competition  

  Fashion  houses  are  moving  quickly  to  extend  handbags  into  their  product  offering  based  on  some  of  the  economic  conditions  noted  above  as  well  as  to  attract  consumers  into  their  stores  with  a  lower  price-­‐point  item.  

  The  rapid  expansion  of  Wal-­‐Mart  and  Target  to  sell  stylish  clothes  and  accessories  at  low  Prices  threaten  the  growth  of  dedicated  accessory  retailers  such  as  Coach.  

Coach  –  91007    

1.25%   Industry  experts  suggest  there  is  notable  growth  in  

1.0%   Identify  and  expand  customer  loyalty  program  

Pre-­‐owned  Handbags  

the  leasing  and  sale  of  pre-­‐owned  handbags  (such  as  Bag  Borrow  Steal)  with  the  Increasing  desire  for  women  to  have  the  “it”  bag  and  shed  their  old  handbags  for  the  more  current,  stylish  Handbags.  

to  retain  its  most  profitable  customer  and  potentially  move  customers  up  the  pyramid  from  Iron  to  Gold  and  Gold  to  Platinum.  I  would  recommend  Coach  offer  “Fashion  Rewards”,  similar  to  that  offered  at  Nordstrom’s.  When  so  many  points  are  accumulated,  customers  obtain  different  status  level.  These  status  levels  are  associated  with  privileges  and  are  increased  as  status  is  increased.  This  would  encourage  continued  loyalty  to  the  Coach  brand  and  encourage  additional  shopping.  It  could  be  used  across  all  customer  levels  because  the  program  in  it  rewards  the  highest  potential  customers  the  most  with  additional  gift  certificates  and  privileges.  

Coach  –  91007      “Lipstick  Affect”  

2.0%   Due  to  the  current  financial  condition,  there  is  increased  pressure  on  consumers  to  not  purchase  an  entire  new  outfit,  but  rather  update  an  existing  outfit  with  a  bag  or  accessory.  

0.5%   Since  the  current  crisis  has  affected  the  majority  of  the  population,  Lead  and  Iron  customers  will  spend  less  luxury  handbags  and  expensive  apparel.  Again,  Coach  should  consider  a  

     Work  Cited:    NRF  –  National  Retail  Federation  Koncept  Analytics  Claritas  Author  Assumptions  

This  has  given  rise  to  the  fashion  industry  putting  greater  emphasis  on  accessories  and  accessories  playing  a  more  prominent  role  in  advertisements.  

marketing  incentive  such  as  earning  points  to  gain  profit.  

Total   7.75%     2.25%    

%  Inc/Dec     5.5%