How did Coach's rivals react to its brand transformation?

Coach's rivals reacted to its brand transformation by dubbing it as 'McDonald's luxury'. This was due to Coach's shift in focus from being an aspirational luxury handbag and accessory producer to an affordable and accessible luxury brand. This shift confused consumers and led to a drop in sales, which was seen as a negative move by its competitors.

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Brand Management

Your brand image can make or break what you do. Whether you want to overhaul an existing brand image find your brand voice for the first time, this pr...

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Another major reinvention came from the American luxury brand Coach. Around 2014, Coach began to see sales plummet for four quarters in a row. This was because Coach pivoted away from an aspirational luxury handbag and accessory producer into a "lifestyle brand" that confused consumers with too many offerings at its full-service stores. In fact, it was estimated by analysts that 60% of its earnings came from outlet stores. Because the company developed a reputation of always being on sale, its focus on being an affordable and accessible luxury brand led its rivals to dub it "McDonald's luxury."

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What challenges did Coach face in its transition and how were they addressed?

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Coach faced several challenges during its transition into a lifestyle brand. The main issue was that the shift confused consumers due to the increase in product offerings at its full-service stores. This led to a significant drop in sales for four consecutive quarters. Additionally, the company developed a reputation for always being on sale, which undermined its position as an affordable and accessible luxury brand. To address these issues, Coach likely had to refocus its brand strategy, streamline its product offerings, and work on rebuilding its brand image.

What were the practical implications of Coach's shift to a lifestyle brand?

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The practical implications of Coach's shift to a lifestyle brand were significant. Firstly, it led to a confusion among consumers due to the broad range of offerings at its full-service stores. This was a departure from its previous focus on luxury handbags and accessories. Secondly, the shift resulted in a decline in sales for four consecutive quarters around 2014. Lastly, the company developed a reputation of always being on sale, leading its rivals to dub it as "McDonald's luxury". This focus on being an affordable and accessible luxury brand diluted its brand value.

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