Luxury's shift: why high-end bags are suddenly 'affordable'
A decade ago, even the most opulent handbags were pitched as attainable luxuries. Now, as brands inflate prices and consumer spending cools, a surprising trend is emerging: luxury is returning to the masses, albeit in a subtly redefined way.
The aspirant's exit
For years, the allure of designer bags fueled a desire amongst aspirational shoppers, offering a taste of the established elite. However, escalating costs and a perceived lack of value have driven many of these consumers elsewhere, gravitating towards contemporary labels like DeMellier, Polène, and Staud, or shifting their spending towards experiences—beauty, eyewear—that offered a more justifiable investment.
Value over exclusivity
“Aspirational buyers haven’t fallen out of love with luxury, but they are far more value-conscious,” explains Federica Levato of Bain & Co. “They are downtrading to accessible brands, shifting spend into ‘small luxuries’, like beauty and eyewear, and embracing pre-loved bags rather than paying for incremental price hikes that aren’t matched by product substance.” The emphasis is now squarely on demonstrable quality, enduring craftsmanship, and thoughtfully designed pieces – qualities that consumers are increasingly scrutinizing.
Brand response: lowering the barrier
Recognizing this shift, luxury giants are strategically expanding their entry-level price points. As Bernstein analyst Luca Solca notes, “Modern luxury behemoths cannot just rely on the super rich, as important as they may be. The middle class consumers – by the million – still drive much of their sales.” Brands are employing tactics like introducing alternative fabrications, smaller iterations – think mini bags – and entirely new product families to ease the financial burden.
Contemporary labels thrive
Meanwhile, contemporary brands that gained traction during the era of luxury elevation are navigating their own challenges. Maintaining desirability requires more than just a fleeting ‘It’ bag; they must offer a clear price-to-product ratio. Brands like DeMellier, with its commitment to ethical sourcing and durability, and Staud, prioritizing design and emotional resonance, are demonstrating the path forward. Llusia-Lindh of DeMellier emphasizes, “We make the bags we want to make – we don’t cut the quality or design or material, we cut the margin.”
New designs, new opportunities
Recent launches from Dior, Gucci, and Chanel – priced below their respective medians – signal a deliberate strategy to recapture the aspirational market. Gucci’s Lunetta and Giglio lines, with their smaller, more accessible designs, exemplify this shift. Chanel, too, is adapting, offering smaller versions of iconic styles like the Jackie – ranging from $2,000 to $3,200 – broadening access to its heritage. JP Morgan analyst Chiara Battistini highlights that these strategic moves are lowering Chanel’s median price.
Beyond price: the emotional connection
However, simply reducing prices isn’t enough. As Solca argues, “Moving downward and nothing else is almost guaranteed to damage brand equity.” Brands must maintain a strong overall vision, balancing price with a compelling narrative. The key, according to Levato, lies in tapping into enduring luxury codes while injecting newness and emotional resonance. Prada’s Re-Nylon and Re-Edition lines, with their recognizable elements and more approachable price points, demonstrate this approach effectively, as does Jacquemus’s Le Chiquito, propelled by social media virality.
The future of entry-level luxury
The competition for the next ‘entry-level’ It-bag is intensifying. Brands like Staud are focusing on creating bags with a distinct point of view – “bags that someone wants to carry every day”– rather than chasing fleeting trends. Ultimately, success hinges on a delicate balance: design, price, and a genuine connection with the consumer. As Llusia-Lindh concludes,