Two luxury brands with very similar identities, totally at odds on strategy, so which one has the right idea?
Mulberry announced earlier this month that following other luxury brands by rapidly increasing prices as the brands popularity grew, has left them out in the cold with the British customer. While the Eastern European market in still buoyant in the luxury sector, it seems the loyal British customer has been priced out of the market- ironic as it was in the UK where Mulberry (carried by Sienna Miller, Kate Moss & Keira Knightley) initially found fame. A large proportion of customers sought out Mulberry for the unrivalled craftsmanship, quality and timeless design present in each handbag. Being on-trend was less important than owning a bag that works with everything in your wardrobe and doesn’t buckle at the first sign of wear. The product remained ‘right’ but the price was ‘wrong’. Acknowledging the error of judgement, Mulberry will be introducing a more affordable range (£495-£700) in June.
(Alexa Pickle Green tote £1,100)
On the other side of the pond Coach is also experiencing a downturn in profit. In a bid to step outside the shadow of its competitors, Coach plans to raise prices. Maybe the fact the luxury market is over-crowded isn’t a problem that can be easily solved by changing your competitor. Looking at why your competitors are succeeding would surely be a better solution? A brief look at Kate Spade’s fearless approach to design and quirky styling quickly provides the answer to why this brand is growing so swiftly. Michael Kors isn’t quite so radical in design but boy this brand has embraced social media in BIG way.
Hopefully Coach has studied the mistakes Mulberry made and has a fool-proof plan to convince loyal customers that the extra cost of owning one of their lovely handbags is truly worth it.