Bags are usually the highest margin items within fashion brand categories, bringing in the top revenue. The category benefits from a long-term nurtured image of what defines an expensive look.
This is reflected in luxury group reports (those that disclose these figures).
According to Kering's 2023 Annual Report, leather goods were #1 revenue makers and contributed to:
53% of Gucci's revenue
71% of Saint Laurent's revenue
77% of Bottega Veneta's revenue
According to Hermes 2023 Annual Report Leather goods & Saddlery cotributed to 41% of revenue (#1 revenue maker).
According to Prada Group 2023 Annual Report Leather goods cotributed to 45.6% of revenue in retail net sales - sales through directly operated stores and e-commerce (#1 revenue maker).
According to LVMH we don't have revenue breakdown by fashion categories:)
e-Commerce Display of Profit Makers
Let's check how brands reflect their cash cow categories in their website menus.
After navigating the intricate paths of luxury e-shops, I would divide the approaches to displaying profit makers into three groups:
1. Champion Boosters: bags are on top of list. This brands put leather goods on the first place in the menu.
Example: Dior, Jacquemus, Bottega Veneta, Louis Vuitton, Gucci.
2. Careful Thinkers: bags are displayed after ready-to-wear in the second position.
Example: Prada, Valentino, Loro Piana, The Row, Versace.
3. Methodical Minds: follow the logical order of display and put bags after ready-to-wear and shoes.
Example: Hermes, Saint Laurent.
My Approach
Although I understand the desire to play to strengths and capitalize on bag's status as statement pieces and aspirational items within the luxury market, I do not agree with the general practice of displaying bags as the most profitable category at the top of the list.
At the same time, if we think about putting together an outfit, it starts with ready-to-wear, then shoes, and finally we finish with a bag. By breaking this logical order in display, customers may feel frustrated due to the disrupted flow of browsing. More importantly, rather than having bags overshadowing other categories, the leading category could be used to strengthen other less noticeable categories. In strategic terms, this diversifies potential risks by not overly relying on one category.
Because of that I stick to logic flow display, used by Hermes and Saint Laurent, when bags come after ready-to-wear and shoes.
* I offer e-commerce consultancy to enhance the customer journey and to help brands achieve the most from their digital presence. Details: https://www.2jour-stylist.com/consultancy-services