Home Blog 2019 Handbag Market Dynamics Have Changed
Oct 9, 2019

Women’s Handbags – The New Normal

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The women’s handbag/totes business is down over 20% in the first eight months of 2019, compared to 2016*. This is clearly not a blip – it’s a major shift, and it is time for us to dig deeper to understand what’s driving it, and to really think about the future of the market. The challenge is that it’s not just one thing driving the decline – it’s a convergence of many marketplace dynamics.

Consumer priorities and spending have shifted toward products that provide convenience at home, media entertainment, wellness, and the new fashion status symbols – active apparel and footwear.

Today’s consumer is looking for a solution, not just a bag. Consumers expect a lot from the products they are buying, from function and versatility to a brand’s engagement in the social and environmental issues that matter to them, and the luxury market is not immune to these pressures.

Not everything needs to be new, or even owned, anymore. The growing resale segment is both a threat and an opportunity for the handbag market, and I expect renting will gain traction in handbags during the next few years.

What’s Next?

I do not see the handbag business returning to its former glory, where a few hot brands/items were enough to drive the market as a whole. The core department store handbag business is struggling due to lost traffic and lack of excitement. A logo isn’t enough anymore – consumers are making much more calculated purchasing decisions than in the past – as an NPD study focused on the Millennial handbag consumer found, shopping for handbags is “closer to buying a car than to buying clothing.”** Judging by how long I have been thinking about a new work bag, I believe this remains to be true.

This is not to say that there won’t be bright spots – they are just likely to come from smaller players that are very in-tune with consumers’ priorities. In addition to the 40, or so, new bag brands that have come through my Instagram feed in the last three months alone – all seemingly looking to reinvent the bag for today’s consumer – I was really happy to see that the many of the designers that submitted bags for both the 2019 Independent Handbag Designer Awards and the recent Accessories Council Design Excellence Awards considered the features and benefits of their submissions, not just the aesthetic.

Unfortunately, more headwinds abound. NPD’s Navigating Pricing in a Post-Tariff World study deemed handbags to be a “high-impact” category, at risk for additional sales declines as a result of tariffs – consumers consider handbags a “nice-to-have” category and not a “must-have” category. In addition, if the economy moves towards a recession, we’ll likely see a doubling-down on that sentiment.

Handbag brands and retailers cannot rest on their laurels and wait for the market to bounce back – it won’t. This business needs to become far more consumer centric than it is today in order to return to growth.

*Source: The NPD Group/Consumer Tracking Service, Jan-Aug ’19 vs. Jan-Aug ‘16
** Source: The NPD Group & Stylitics / The New Handbag Customer Revealed 2016


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