A decade ago, almost all luxury houses offered an ‘affordable’ handbag. These styles, usually smaller bags priced around the $1,000 mark, provided the aspirational shopper with a slice of heritage and a taste of capital-F fashion. But as brands hiked prices in the name of elevation, those who once aspired to own a designer bag found themselves increasingly priced out of the category and skeptical of luxury’s value. Where did those consumers go?
Many turned to contemporary labels — DeMellier, Polène, Staud — or shifted their spending toward categories or experiences that felt easier to justify. “Aspirational buyers haven’t fallen out of love with luxury, but they are far more value-conscious,” says Federica Levato, senior partner at 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.” That substance translates to characteristics such as quality, craftsmanship, design, or creativity, all of which consumers are increasingly questioning.
Now, as the risk of relying on ultra-wealthy shoppers rises, luxury brands are expanding the entry levels of their pricing pyramids. “Modern luxury behemoths cannot just rely on the super rich, as important as they may be,” says Bernstein luxury goods analyst Luca Solca. “The middle class consumers — by the million — still drive much of their sales.”
For these brands to welcome back the aspirational class, however, there needs to be a handbag offering that caters to both their wallets and their tastes. But it’s not as simple as lowering prices. Reducing prices too visibly risks damaging perceptions of exclusivity, while alienating those who paid more for the same product. Instead, brands are introducing styles in alternative fabrications, mini iterations, or entirely new bag families to lower the barrier.
Meanwhile, the contemporary brands that gained market share during luxury’s elevation era are facing a challenge of their own: sustaining desirability as they scale. These labels gained traction by offering consumers a clear price-to-product equation, but as luxury brands retreat into the entry-level space, they must maintain momentum through icon styles that keep their cultural resonance.
“After years of elevation, the most interesting growth is now happening at the two extremes of the price pyramid: high-end luxury and accessible entry points,” says Levato. “A number of players have been recently injecting real newness into the category at price points below $1,700, building a more compelling price-value equation for aspirational customers.” Consumers still want to buy handbags, Levato says, they are just becoming more selective.
Now, as the race to create the next entry-level It-bag heats up at both ends of the market, how can brands win?
Balancing design and price
New creative direction at luxury’s biggest houses has opened up the opportunity for category newness. At the start of the year, products launched by Dior, Gucci, and Chanel were each priced below the brands’ respective medians, according to JP Morgan analyst Chiara Battistini. “We have also observed, at least with these launches so far, more products to enrich the lower end of the pricing pyramid, with more accessories and new ‘entry’ bag lines,” Battistini wrote in a note in January.
Gucci’s new Lunetta line consists of smaller, crescent-shaped shoulder bags priced below $1,150 for a canvas style, while its Giglio tote comes in embroidered canvas for around $1,850. Updated Jackie iterations like the Jackie Slim — a smaller, slouchier version, ranging from $2,000 to $3,200 — in soft grained leather, offers an additional entry point to the house’s leather icons. Even at Chanel, where pricing remains particularly high, its newer Mini Flap styles start from around $4,000, alongside vanity bags ($2,900) and clutches ($3,500) that help to broaden access. According to JP Morgan analysts, these launches lower Chanel’s median price from $6,500 to $5,300.
