TikTok to Tmall, Coach is capturing Gen Z’s attention

Sales are on the up at Tapestry, the group that owns Kate Spade, Stuart Weitzman, and Coach. Earlier this month, the “expressive luxury” conglomerate announced it had beat analyst expectations for the year ending June 29, with revenues hitting $6.67 billion, surpassing last year’s $6.66 billion. Europe drove growth, with full-year revenues up 14% YoY, while Asia revenues rose 9%. The group has much to thank China for, with the brand achieving 3% YoY sales growth there. Tapestry’s golden child Coach has emerged as a potent force in recent months, with CEO Joanne Crevoiserat disclosing on a Q4 earnings call that the brand “continues to build strength on strength.” Bucking the downturn Despite the affordable luxury market poised to grow annually by 5% from 2023 to 2030, key players are struggling. Michael Kors saw turnover drop to 77.2 million British pounds ($102 million) in the year to April 2023, down from 78.3 million British pounds ($103.5 million) the previous year. Capri, Michael Kors’ parent company, reported a 12% YoY sales decline in Q1 2024, excluding currency changes. Tapestry is also under pressure, with Kate Spade’s revenue down 6% YoY and Stuart Weitzman’s down 14%. “Coach’s strategy stands out in the ‘affordable luxury’ market by striking a nuanced balance between heritage and innovation, a contrast to the approaches of competitor brands,” says J’Nae Phillips, senior fashion editor, columnist, and author of the Fashion Tingz newsletter. “While Michael Kors often emphasizes a sleek, jet-set lifestyle and Kate Spade leans into whimsical, colorful designs, Coach has embraced a broader cultural narrative that leans into offering a sense of exclusivity without hefty price tags,” she adds. Phillips credits Coach’s resilience amid the slowdown to its ability to connect with Gen Z, while retaining its mature clientele. “Coach bridges generational divides, keeping its brand relevant and desirable to both new and loyal customers,” Phillips says, citing the revamped Coach Swagger and Coach Rogue bags as products that blend traditional appeal with a modern twist. Honing in on handbags With Gen Z consumers expected to make up a third of the luxury market through 2030, Coach’s success among the cohort isn’t a fluke. "Coach has observed that the younger generation of luxury consumers often seek to express themselves through fashion rather than investing in a piece of clothing meant to last a lifetime," says trend forecaster and co-founder of TouchLDN Andrew Lam. In 2021, the brand began drawing up a robust roadmap to target the young crowd, the Business of Fashion reported in April, which involved meeting with shoppers to understand their preferences. Insights were fed into a dashboard that informed the creation of new, more accessible iterations of its Tabby bag, including entry-level models. The plan paid off. According to the brand, the Tabby’s Q4 sales almost doubled YoY. Experts are watching closely. “I think the luxury handbag brand – and I don't even think that you would consider them actual luxury – is Coach, which is far and away the most frequent handbag brand that I have seen mentioned among teens,” said Gen Z shopping pundit Casey Lewis in a recent issue of Amy Odell’s Back Row newsletter, “Coach has figured out affordable luxury.” Crevoiserat highlighted Coach’s handbag category as the primary profit driver during the earnings call. The introduction of new silhouettes keeps Coach at the forefront of Gen Z’s attention. Earlier this year, the brand released a reimagined version of its 1998 Swing Zip bag, sparking a TikTok frenzy. There are currently 1.7 million posts dedicated to the style on the platform. Then there are accessories: for FW24, Coach tapped into Gen Z’s overarching trend of “Birkinifying” bags, adding a playful twist with New York-themed memorabilia. The bag-candy has resonated with Gen Z’s love for personalization, marrying kitsch and style. Refreshed digital strategy Coach’s digital strategy is also markedly different to rivals. On TikTok, the brand has eschewed typical influencer marketing, instead leveraging retail employees. It’s a move, Phillips says, that allows Coach to “showcase its products through the lens of those who understand the brand best.” With Gen Z’s value-driven approach to fashion, choosing experts over influencers enhances Coach’s credibility. “Coach is not just selling a product,” says Phillips, “but fostering a community that feels inclusive and participatory.” Lam concurs, noting that "the brand builds a strong community through culturally relevant collaborations with local influencers and artists." The brand similarly deploys local employees in its China marketing. While competitors rely on the celebrity factor to aid sales, Coach has struck the right balance between staff and stars to appeal to younger consumers. The brand’s 2021 collaboration capsule with Bape, for example, sold out in six hours via a livestreaming event featuring actress Qi Wei. Making its mark An early adopter of WeChat and Xiaohongshu, Coach led the luxury sector by launching the first flagship store from a foreign brand on Alibaba’s Tmall in 2014, and became the first in its category to open an e-commerce store on Douyin. The brand also has a knack for tapping into local trends, exemplified by its embrace of China's livestreaming boom. After leaning into livestreaming during the pandemic to conserve brand awareness during lockdowns, Coach intensified its efforts post-reopening; it became one of the first luxury labels to host a livestream debut on Tencent-backed Kuaishou in 2022. “By making inroads in global expansion, particularly in markets such as China, it’s capturing international consumers who want trend-led designs from a brand they can trust,” says Phillips. Going greener Coach’s original models are also gaining traction, with teens raiding their mothers’ wardrobes to dig out vintage pieces on social media. Popular content creators, including @Wildernessstyler and @Yooon_ie have amassed major followings through videos scooping up disheveled Coach bags at thrift stores and restoring them to their original condition. With 81% of Gen Z shoppers more likely to purchase environmentally friendly products, Coach isn’t just listening to the demographic’s call for greener practices; it’s acting on it. In April last year, the brand launched its climate-conscious sub-brand Coachtopia, with the lab’s first drop comprising eco-friendly alternatives, including bag handles made from melted-down acrylic scraps. To further promote circulatory, each product came equipped with its own electronic tag, allowing the product to be tracked throughout its life. When it’s ready to be recycled, the owner can send it back to Coach. Looking ahead Coach’s efforts expand beyond Gen Z. As the cohort matures, the brand is already eyeing the next generation of spenders: Gen Alpha. With a quarter of consumers expected to spend at least one hour a day in the metaverse, the brand is investing aggressively in emerging digital formats, including digital stores, gaming (in July, Coach unveiled ambitious plans to sell physical pieces via Roblox and Zepeto), and virtual idols. The label was among the first on Tmall’s luxury platform to release a digital collectibles collection, alongside collaborating with Tmall’s virtual influencer Timo. A Coach zippered sweater, worn by the metahuman, sold over 100 pieces. While rivals grapple with understanding what new luxury spenders want, Coach seems to know exactly what it is – and how to give it to them. For Phillips, the brand’s grassroots approach to the highly discerning demographic is a breath of fresh air. “The brand is meeting its intended target audience where they’re at,” she says. “By creating immersive, narrative-driven experiences, Coach not only sells products, but also crafts an emotional connection with its audience.”

Coach’s not-so-secret weapon? Gen Z

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Coach’s not-so-secret weapon? Gen Z