Innovation & Design

Marc Jacobs Wants to Carry Your Books


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It's that time again: once Labor Day passes, it's bye-bye barbecues and beaches, hello back-to-school seriousness. The start of the academic year is marked by hordes of backpack-toting scholars hitting campuses across the country, hauling bulging packs filled with laptop computers, PDAs, mobile phones, and textbooks from class to dorm and back again.

It's a scene mirrored, too, by urban commuters lugging their PCs and Blackberrys to and from the office, often in the same types of affordable and ergonomic canvas backpacks favored by grade-schoolers, grad-schoolers, and workplace grinds alike. But for those student and grown-up schleppers who want to graduate from the generic rucksack, there are plenty of stylish options available this fall to accommodate serious carry-all needs and complement a fashionable—or professional—wardrobe.

One reason there is such an abundance of fashionable backpack alternatives this season is that oversize bags are "in." Just look at the fashion pages of the September, 2006, issue of Vogue magazine. The issue features models carrying unusually enormous handbags from top designers such as Chanel, which was previously known for dainty, ladylike purses.

THE ASHLEY EFFECT. Most of the bags Vogue features, including a couple of bike-messenger-sized offerings from Louis Vuitton, are certainly large enough to accommodate PCs—perhaps testament to the ubiquity of personal electronics. The book-friendly styling also reflects luxury-goods makers' increasing bid to attract affluent, status-conscious college students and younger consumers.

After all, collegiate fashion icon Ashley Olsen (the actress and producer of Mary-Kate and Ashley fame) is often photographed walking to her classes at New York University carrying stylish designer bags. She's been snapped, for example, carrying a coveted Hermès Birkin Bag, which can cost $6,000 or more, in favor of a canvas backpack. What Olsen carries has a ripple effect, influencing other college students who see her picture in magazines and grow aware of the brands she favors.

"The appeal of luxury has widened across the country. And luxury's demographics have widened too. Celebrities are wearing luxury products more and more, and are receiving increasing media attention," observes retail analyst Dana Telsey of the Telsey Group. "Plus, college students seek to be style icons themselves, more than in previous decades. Thanks to the media, fashion is mainstream. It has become a hobby."

LUXURY MARKET RISES. Analysts predict that worldwide luxury-goods consumption is on the rise. Market research firm Mintel estimates the global luxury-goods market at $87.5 billion in 2005, up 9.2% from 2004. The increase in sales, suggests a July, 2006, report from Mintel, is related to the increasing trend of luxury goods companies expanding their store networks to both build brand awareness and more efficiently control how and where their products are sold.

The latter strategy helps luxury-goods makers avoid problems such as counterfeit goods that rob companies of revenues. Mintel predicts the international luxury-goods market will grow by as much as 33% between now and 2010. China's growing economy and its rising consumer base represent opportunity for increased sales of luxury items, such as status-symbol handbags.

A caveat for college students and recent grads interested in purchasing, say, Louis Vuitton's $2,100 Taiga Ivan bag, of course, is the steep price tag. Such a purchase can max out a credit card. The latest statistics from student-loan lender Nellie Mae on college-student credit card use, published in May, 2005, show that 91% of seniors have at least one card in their wallets; 56 % have four or more.

PUT THAT ON CREDIT. And the tendency to borrow money increases during four years of college. Final-year students have an average balance of $2,864, nearly twice as much as freshmen. The same Nellie Mae survey found, however, that credit card debt among college shoppers is actually decreasing, although students are clearly still using their plastic.

In 2004, the study reports, 76% of undergrads began the school year with a credit card, down 8% from 2001. And the average outstanding balance on all undergrad cards (from freshmen to senior students) was $2,169, down 7% from 2001 and the lowest since 1998.

With high-fashion designers such as Isaac Mizrahi creating mass-market lines of tote bags and apparel for Target (TGT), students (and commuters) on a budget seeking fashionable backpack alternatives can find them. And innovative design elements seen in luxe tote-bag designs that debut on, say, the Marc Jacobs runway in New York trickle down to "masstige" (an adjective referring to mass-market prestige-generating labels) chains such as Coach (COH), and eventually to mass-market outlets such as Wal-Mart (WMT).

CHEAP CHIC. Consider the cargo-pocket bags by hip designer Marc Jacobs, his signature handbag style of several years ago. The outer-pocket-style bag can now be seen in a variety of lower-priced bags, including $134 styles from Gap (GAP).

And speaking of Marc Jacobs, the ultra-chic designer, like Mizrahi and other labels such as Donna Karan, has lines of bags available at a variety of price points. The idea is to increase brand recognition and, ultimately, overall revenue. "Luxury brands can grow through extensions, geographic expansion, and new store growth," says analyst Telsey.

Marc Jacobs-label bags can cost up to $1,400 and are made of buttery, high-quality leathers. The less-expensive Marc line includes fabric totes for as low as $178. And Jacobs' limited edition, "Special Items" series, available only in Marc Jacobs stores, features a roomy, $44 tote—which looks like a chic version of L.L. Bean's classic preppy canvas Boat-and-Tote bag.

SAME LOGO, LOWER PRICE. The Marc Jacobs version is made in of-the-moment metallic material. Granted, it's a plastic-coated fabric, not leather, but the surprisingly flexible and sturdy bag is rain- and snow-proof, a plus for students and commuters seeking to protect their laptops and papers. And for those consumers who are status-conscious, the Marc Jacobs imprimatur is emblazoned inside the bags, as well as stamped on the faux-metal hardware on the bag's exterior.

Generally speaking, new backpacks and bookbags—designer-made or otherwise—are increasingly becoming a must-have item on most students' back-to-school shopping lists. In a July, 2006, report, market researcher NPD Group found that 46% of the 40,000 shoppers surveyed who were planning to purchase items in advance for the fall 2006 academic year looked forward to purchasing new school bags or knapsacks.

That's up from 41% in 2005. Savvy designers targeting the student market can build not only brand recognition but also brand loyalty, which could pay off as younger customers graduate to higher spending budgets and gravitate toward certain luxury labels when they trade in their bookbags for commuter briefcases.

For a selection of BusinessWeek.com's picks for the newest must-have backpack-alternatives (in a range of styles and price-points) for the fall 2006 back-to-school/back-to-work season,

see the slide show.


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