Coach Conquered Gen Z. What’s Next?

If you’re over the age of 30, you may not have recognised many of the faces in the front row at Coach’s latest runway.

The celebrities who attended the brand’s Monday show at Pier 36 were something of a who’s who of Gen-Z A-listers, including the actors Elle Fanning, Charles Melton, Yasmin Finney and Avantika; musicians Girl in Red and GloRilla and basketball players Aneesah Morrow and Jayson Tatum. It was a fitting lineup for a brand that’s mounted a successful turnaround with a laser focus on appealing to that very demographic.

“I believe the next generation is really pushing this change of the definition of what luxury is,” said creative director Stuart Vevers, who joined Coach in 2013 and has been one of the main architects of its comeback, told The Business of Fashion. “By listening to and working with the next generation, they helped us become more true to who we really are.”

Its approach has been centred on using youth-friendly marketing — think quirky campaigns and relevant pop cultural team-ups — to sell leather goods and clothes that feel attainable for shoppers with a smaller budget, but still special. (One of its latest hits, the Brooklyn bag, starts at $225.) The strategy, years in the making, is working: In August, it reported that sales jumped 14 percent to $1.4 billion in owner Tapestry’s fourth fiscal quarter. At an investor day last week, Coach chief executive Todd Kahn said their ambition is to turn Coach into a $10 billion brand.

But Coach has been here before. The brand had a hot streak in the aughts, winning over then-teenaged Millennial customers with heavily logo-ed bags and brightly coloured wristlets. That ubiquity ended up being an Achilles heel, and the brand became overexposed, omnipresent in outlet malls and on the sales rack at Macy’s.

The memory of that period is particularly potent for Kahn, who joined the brand in 2008, just when this downturn was taking hold.

“It always plays in the back of my head a little bit,” Kahn said of that time, adding that constant reminder shapes his attitude when looking forward. “We celebrate our current success for about 30 seconds, and then we’re quickly on to ‘Alright, what’s next?’”

This time, Coach is committed to not making the same mistakes. At the heart of its plan to maintain its momentum is a continued focus on appealing to the young consumers who will always be interested in an entry-level luxury tote or crossbody, even as Gen Z ages up.

“Over the next five years, just in the markets we sell, there will be 25 million women who turn 18 each year,” said Kahn. “Our goal is to be their first bag.”

How Coach Made a Comeback

Coach’s turnaround offers a lesson in how to mount a brand reinvention. Lean into your core — for Coach, that meant a refined assortment of leather goods and an identity rooted in its home city of New York — but with a more modern, elevated positioning.

That approach came to life on Monday’s runway, where guests sat in a cavernous room lined with vintage-looking, sepia-toned photos of NYC while the models showcased many of the brand’s signatures with a heavy dose of Gen-Z quirkiness, including plaid pants and skirts printed with its classic “C” logo, necklaces with leather coin purses dangling off the end, shredded sweaters and oversized clear glasses.

Beyond the runway, that’s most acutely seen in the updates to the brand’s product and marketing, both meant to appeal squarely to their target audience of younger customers. Both Kahn and Vevers agree that the crux of why their strategy to win over Gen-Z customers has worked is that it’s rooted in giving them what they’re looking for — without pandering.

“It’s really important to me that we’re not just extracting from Gen Z, but that we are collaborating, listening and creating a future together,” said Vevers.

That starts with data — Vevers in particular is constantly looking at what’s selling and taking those metrics into consideration. But it also means actually getting out and talking to consumers around the globe, visiting not just stores, but customer’s homes, looking at their closets and getting an on-the-ground sense for what they want to buy.

That feedback, coupled with a heavy dose of gut instinct, shapes not just product decisions, but marketing ones, too. The brand tries to thread a line between paid and organic promotion, focusing on orchestrating moments that put it in culturally relevant areas and will take on a life of their own. For instance, it placed its bags in Gen Z’s favourite series of the year, “The Summer I Turned Pretty” (months after casting the show’s star, Lola Tung, in a campaign), and inked a partnership with the WNBA to become the league’s first bag sponsor.

Even in smaller moments, like a staged paparazzi shoot to launch a new bag, it’s about creating something that will build buzz but still feels natural and authentic.

“Of course, people get paid to wear these things,” said Kahn. “The difference is if it feels right.​ The storytelling is … richer than just here’s a celebrity wearing a pretty bag.”

It’s creating those instances for audiences outside the US, too, partnering with stars like Korean rapper Youngji Lee, Japanese musician Lilas and Korean artist Soyeon.

What’s Next for Coach

Effective marketing, of course, ideally leads to growth. And while the goal is for Coach to keep getting bigger, this time, they don’t want to do so too fast.

“We are not looking to churn,” said Kahn. “I could add a billion dollars of sales next year, but not in a healthy way. Our growth is much more structured to be sustainable.”

Much of how that will work in practice is rooted in decisions around product. Certain styles remain a part of the brand’s assortment for a longer period of time, and generally Coach is being more refined and thoughtful in how they introduce new styles or reinterpret current ones.

Kahn pointed to the example of the Tabby, a bestseller since its 2019 launch. After the bag first reached its peak, he said, Coach’s previous instinct would have been to pull it and put out a new but similar bag under a different name. Instead, they reworked it, creating the Pillowed Tabby bag, turning the silhouette into a standing collection for the house.

At the same time, they don’t want to become too reliant on any one style, or trend. Even the Tabby, still its number one, only represents about 10 percent of sales.

Similarly, while the focus is on a young customer, Coach doesn’t want to rely too heavily on any one particular generation. Vevers described their approach as looking to what excites young people for inspiration, rather than trying to fit into a cookie cutter idea of what a Gen-Z brand looks like. Soon enough, that will mean looking to the tastes and preferences of Gen Alpha and eventually, Gen Beta.

When you focus on the future, “you actually bring a lot of other people along,” he said. Coach has seen that firsthand: While growth has been most substantial among Gen Z, it’s seen an uptick among all age demographics.

Knowing when to jump and when to hold back, Kahn said, will be key to charting Coach’s next steps. The brand’s current peak has meant that it has more opportunities than ever, but strength will come from knowing which ones are the right fit, an instinct that success has sharpened.

“We’ve got a confidence again in who we are and what makes us different,” said Vevers.

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