How one key obsession can build and drive a legacy brand
- One blockbuster innovation isn’t enough to maintain sustainable growth or achieve “legacy brand” status.
- An obsession with “what made consumers tick” was a significant competitive advantage for luxury brand Coach, Inc.
- Market research at Coach uncovered women using bags-within-bags — and this key insight unlocked a surge in sales.
Brands that stand the test of time innovate to stay relevant and build upon the product imagery that first captured customers’ hearts. So-called legacy brands and their associated images include Timberland boots, the Burberry raincoat, Tiffany diamonds, and Levi’s jeans. Even Disney, whose fantasy characters remain central to the customer experience. Each consumer-facing brand expanded its appeal while staying true to its foundational equities. Conservative Burberry got sexy by putting its tartan pattern on bikinis. Tiffany signed Elsa Peretti to design more accessibly priced silver and gold jewelry that was still distinctively elegant. Traditional Disney acquired Pixar’s more modern storytelling. By definition, legacy brands can also survive a spate of bad management, bad economies, even bad luck — but not in perpetuity.
Was Coach a legacy brand? We first put our distinctive glovetanned leather bags into people’s hands back in the 1960s, and they not only used them, they also cherished them. Now, as we entered a new decade (the 2000s), we were striving to create products people loved by embodying our brand’s fundamental equities — quality, function, durability — but also by expanding our brand’s personality to be more fun, fashionable, and feminine. To that end, our Signature C logo products were a grand slam, and a rare game-changing achievement in the fickle fashion business. But one blockbuster innovation isn’t enough to maintain sustainable growth, or achieve legacy status. Coach had to keep innovating by offering exciting products, anchored in bags, with aesthetics and prices that appealed to a larger cross section of consumers.
One safe, predictable way to innovate was to build on prior product successes.
We did this in many ways, like iterating upon our most popular bags, which we dubbed power styles. We turned the bestselling Hamptons Weekend Tote into its own collection, with new shapes and materials, like nylon instead of cotton, and top corners that folded in, but could also expand out for more interior space. In stores we filled the tote with beach towels and Signature flip-flops to alert people how they might use it, and sales staff made sure you knew that the nylon was water- resistant, perfect for the beach. The Hamptons Weekend Collection sold 60,000 units when it launched in 2003, bringing in about $10 million in sales. The next year we iterated on it again, and sales tripled.
Our obsession with what made consumers tick remained a competitive advantage. Analyst Dana Telsey from Bear Stearns would tell Women’s Wear Daily that our momentum was unique for the industry. “I think the fact that Coach knows so much more about its customer helps them keep that customer.” She was right. In 2004, we spent about $3 million on market research and surveyed some 14,000 people as we divined new collections that leaned into lifestyle trends, including products that filled usage voids.
One of the best examples of how we paid attention to what made consumers tick came about shortly after the IPO. We observed women using bags-within-bags, mainly their small cosmetics cases, to hold more than lipstick but also keys, credit cards, and other essentials so they could be found easily in a crowded tote or briefcase. [Creative director] Reed [Krakoff] created a 6-inch-by-4-inch zip-bag expressly for this purpose, adding a looped strap to the pouch so it could hang from a clasp inside a larger Coach bag, or around your wrist. Cleverly, our team named it the “wristlet” — bracelet + wallet + wrist — and we sold it for about $48. Women began taking just their wristlets when they went to the gym, shopping, or out dancing with friends. And they bought multiple wristlets for different occasions. A simple one for walking the dog. A fancier one for a party.
By definition, legacy brands can also survive a spate of bad management, bad economies, even bad luck — but not in perpetuity.
In 2004, wristlets in 75 iterations generated $40 million in sales, which at 4% of our overall revenue was quite impressive for an item at such a low price. Innovations like the wristlet became new beloved companions, prompting articles like this one from the Wall Street Journal, “How Coach Won a Rich Purse by Inventing New Uses for Bags.” The idea of the every-occasion bag for all day and all year round had given way to the notion that you could choose a bag based on your mood and moments. Reed and his team of designers continued to style our bags to be about attitude as well as occasions, encouraging people to keep expanding the role handbags played in their lives.
