Shifting Consumer Behaviours Shape Strategies for Leading Personal Accessories Brands
By Benjamin Schneider
While only a handful of personal accessories companies own and operate many of the top-selling brands across the bags and luggage, jewellery, watches, and writing instruments categories, the industry is in fact highly fragmented, with unbranded and private label products earning a significant share of value sales across regions.
Now, with the Coronavirus (COVID-19) pandemic accelerating several global consumer trends toward increased digital device use, as well as increased value and values-driven consumption, many leading players are employing a set of similar strategies to build their brands and drive profits. These include:
Meeting a digital-first new normal
As home isolation has accelerated the increasing use of digital devices, brands are adapting their sales and marketing tactics to reach consumers where they are most often. Having already prioritised digital marketing channels and launched digital-first shopping solutions, like video-based personal shopping appointments, on their e-commerce sites, brands are now seeking to drive sales by replicating consumers’ favourite aspects of in-store shopping – such as shopping with friends and trying items on – entirely online, while also integrating more digital features into the in-store experience.
Expanding product offering and customer base
With the growth of digital marketing channels now meaning fewer untapped consumers, brands are leveraging their equity by growing their offering both within and across product categories. By capitalising on their manufacturing, marketing, and distribution prowess to efficiently expand their product lines, companies are finding that they can both attract and retain customers without much additional marketing spend.
Considering that wholesale-dependent brands are vulnerable to the fates of their retail partners, companies are increasingly terminating distribution deals and prioritising their own store and e-commerce networks. In doing so, brands are launching increasingly sophisticated e-commerce sites across markets, investing in fulfilment infrastructure, and creating social media content to drive traffic to e-commerce sites and digitally-enabled physical retail stores. Consequently, many are finding higher margins, more control over brand and product presentation, and, most importantly, the opportunity to gather valuable customer data.
Taking ESG centre stage
Finally, as consumers increasingly scrutinize companies’ treatment of people and the planet, Environmental, Social, and Governmental concerns are becoming top-of-mind. Wanting to support companies that reflect their values, many consumers are researching the actions and attributes of their favourite brands and products, and championing companies on social media whose agendas they support. As a result, brands are responding with a host of new products and partnerships, and companies are increasingly incorporating ESG initiatives into their short, medium, and long-term strategies and planning.
While personal accessories players seek to recover from record low sales in 2020 over the coming years, many will still be mired by economic constraints, supply-chain disruptions, limitations to in-store shopping, and other pandemic-related effects.
At the same time, many of the largest companies are likely to take advantage of opportunities to acquire smaller, independent, and cash-strapped brands at a discount, and leverage portfolio-wide synergies in marketing, logistics and retail to grow their new brands’ desirability and profits.
Therefore, while today’s most impactful industry players have increasingly turned to digitalisation, product expansion, and direct distribution, in addition to ESG concerns, to deepen customer relationships, the future strategies of personal accessories brands and companies will continually be shaped and re-shaped in response to fast-changing consumer demands and evolving behaviour, in addition to all other market realities.
For more information, see Competitor Strategies in Personal Accessories.