The $8.8 billion handbag market in the U.S. market is facing a generational dilemma. Younger women are less likely than older women to buy and carry handbags, according to an Omnibus survey from Circana, the new company that combined IRI and The NPD Group.
The study found that more than 60 percent of women ages 35 and older report that they always carry a handbag for activities, other than work or school, compared to only 39 percent of women ages 18 to 34.
When younger women do buy bags, they’re more apt to purchase tote bags; shoppers; fanny, waist and chest packs; backpacks, and small crossbody styles, the survey found.
According to Circana’s Checkout, its receipt-based tracking service, which recently expanded to include data for the U.S. accessories market, consumers between the ages of 18 and 34 years old are purchasing fewer handbags than older shoppers. Among younger consumers, unit sales dropped 2 percent year-over-year in the 12 months ending April. Units grew by 7 percent among older consumers versus the prior year. Consumers aged 35 and older also helped offset some of the industry’s year-over-year sales revenue losses.
“Brands and retailers can narrow this generational gap by tailoring their products and marketing messages to the lifestyles of younger consumers,” said Beth Goldstein, footwear and accessories analyst at Circana. “Millennials and Gen Z are seeking both function and fashion, as they embark on their daily activities, special events and travel, so they are looking for products that provide ease and convenience. Versatile, hands-free options, including backpacks and fanny packs, have proven to be very desirable.”
While 18- to 34-year-olds accounted for a decline in the overall handbag market over the past year, sales from certain styles grew for this age group. For example, totes and shoppers were up 11 percent; fanny, waist and chest packs increased 56 percent, and everyday lifestyle backpacks rose 7 percent. Small crossbody bags are the most frequently carried style. Young women are also more likely to carry backpacks, according to the Omnibus survey results.
When Millennial and Gen Z shoppers do buy bags, they’re buying more frequently in directly owned stores or specialty retailers, Circana’s data shows.
“While department stores and major e-commerce players remain the top channels for handbag purchases overall, younger consumers are gravitating to specialty stores that offer newness and innovation, particularly aligned with the prominence of athleisure,” Goldstein said. “From the handbag styles they are buying to where they are shopping, understanding the purchase motives by generation and harnessing the power of these contrasts should be key brand and retailer initiatives,” she said.