Coach Background - Demographics
Although there are no public and current sources to completely answer your question, we have compiled information from several articles and reports from 2013 to 2016 to arrive at the following conclusions: Coach’s target demographic, much like Tory Burch, is men and women age 20-40 in the “affordable luxuries” market. Michael Kors and Louis Vuitton, on the other hand, are targeting roughly the same age range, but in the somewhat more affluent HENRY category (“High Earners Not Rich Yet”), i.e., younger customers earning between $100,000 and $250,000.
Below you will find a deep dive of our methodology and an overview of the useful findings.
We conducted a thorough search of public sources on the luxury handbag industry for references to the four companies in question. As per Wonder's standard procedure, we attempted to restrict ourselves to sources published within the last 24 months to provide the most up-to-date information available. However, while this led us to two recent reports on the luxury handbag market, one from 2017 and one published this year, these reports are proprietary and only available at considerable expense. Other industry sources posted within the past two years, such as white papers, newsletters, and articles written by experts and insiders, did not fully address the question.
We, therefore, expanded our search to older sources and found several articles from 2013-2015 which directly answer the question. While we would normally eschew such dated material, we find them to be both the most recent sources available and were unable to uncover any indication at all that there had been a major demographic shift in the last two years which would make these sources obsolete. Since it is most probable that a major shift in a company’s target demographics would excite comment in the industry, we have high confidence that the sources referenced below, though older, still provide an accurate picture of each company’s customers. However, if the absolute most current data is required for your purposes, we advise considering one of the two reports referenced above.
A Prezi article from 2015 provides an interesting comparison of the target demographics for both Coach and Louis Vuitton. The latter is addressed below, but the original article may prove useful on its own. With its products priced in the $100-$500 range, Coach is considered a pioneer in the affordable luxury industry. Coach targets men and women age 20-40 with mid to high levels of disposable income. As noted in a Sontag Solutions client report, “These people often have the financial means with which they can buy a wide variety of products depending upon the consumer’s particular tastes.” Coach believes that its primary appeal to its customers “lies in its original American attitude and design and rich heritage of fine leather goods.” Coach was 13th in capturing the much-desired market of age 18-34 “luxury” customers in 2016.
In a 2014 presentation, Tory Burch notes that their original target market was 30-45 year-old women. However, this has changed in recent years due to their observation that girls as young as 14 years old were coming in with their mothers and grandmothers to make purchases, especially the Reva Ballet flat. As a result, while Tory Burch continues to focus on women, it no longer limits itself to those of high income, preferring to present its products as within the reach of all incomes. Nevertheless, they still find that most of their customers have at least a Bachelor’s degree, and while they target both single and married women they have a particular interest in mothers for the aforementioned reasons. The actual purchaser, regardless of the age of the possessor of the handbag, usually falls in the 21-40 year-old range (another source states 21-35 years old), with a household income of $60,000 or higher. In other words, they prefer “sophisticated and self-driven women” who live primarily in urban and suburban areas. There is no indication that ethnicity is a factor in Tory Burch’s target demographic, nor indeed in any of the four companies presented here.
According to a 2013 report, Michael Kors target demographic is age 25 to 54, with an annual income of over $50,000. However, they’ve noticed that their accessories and footwear, which generate most of their sales, appeal to a wider demographic, and they have since begun “targeting a younger, affluent demographic, often overlooked by luxury brands.” As of 2016, they had also realigned themselves to target what they call the HENRY customers (“High Earners Not Rich Yet”), younger customers earning between $100,000 and $250,000, a market segment with 22.3 million households worldwide. As noted by Annex Cloud, “This segment is increasing steadily not just in the USA, but all across the globe. Even after admitting the fact that HENRYs individually have a far lower spending threshold than ultra-affluents, there are 13 HENRY households for every ultra-affluent.” Michael Kors was 10th in capturing the age 18-34 “luxury” customers in 2016.
As noted earlier, a Prezi article from 2015 provides an interesting comparison of the target demographics for both Coach and Louis Vuitton. Louis Vuitton targets both men and women of age 22-65 (another source says age 25-50) with an income of $50,000 to $200,000. While originating in Paris, one of Louis Vuitton’s most important markets is Asia; “it is said that the mainland Chinese were Louis Vuitton's third-largest customer segment in the world in 2015.” (See below for more detail on the Asian segment.) Louis Vuitton classifies 46% of its market as “self-indulgers,” 33% as “quality seekers,” and 21% as “status seekers.” Interesting, Louis Vuitton sells only in its own exclusive store (i.e., does not allow its product to be sold in department stores), “in order to make consumers feel that Louis Vuitton is an exclusive brand that is only available in few locations.”
Although only specifically noted by our sources, in the case of Louis Vuitton, the burgeoning Chinese market has grown so much in recent years that it is likely to be a factor for all four companies in 2018. As noted by Martin Roll, “the rising Chinese middle-class, consisting of households with incomes between USD 9,000 and USD 34,000, have become the fast-rising consumer segment in China – they have become the subject of much attention from global brands.” We were unable to substantiate from recent sources that this has become a major factor in the target demographics of all four companies requested, but given the tidal shift in the luxury brand market, we believe that we would be remiss in not mentioning it.
The online market is also an important factor. Michael Kors and Coach, along with Ralph Lauren are dominating the online market share, taking 63.5% of that market between them.
While in some respects, all four companies have similar demographics (particularly in their target age range), there are still some important distinctions. Coach and Tory Burch are targeting the same “affordable luxury” market, with incomes in the mid-five-figure range, while Michael Kors and Louis Vuitton are targeting slightly higher income levels, and Louis Vuitton is extending its reach into Asia. On the other hand, Michael Kors and Coach have heavy footprints in the online market.