Bags

The other week, a few folks at Intelligems went absolutely off about Alo Yoga’s release of a luxury-ish handbag collection. We have a #fashion channel in our Slack, and, to put it mildly, the consensus from those who are most active in that channel was this was a big-time miss and not a fit for the brand.

Far be it from me to comment on the fashion side of it, but I do think the reaction is worth digging into. Specifically: Why can’t an athleisure brand release a luxury handbag?

Amazon started as books on the internet and now we watch football on Thursday nights with them. Ridge started as metal wallets and now guys buy their wedding rings from them.

It feels normal now, but I doubt anyone looked at the aforementioned early online bookseller and said “Hey, I’d like to also buy my cloud computing from them some day.” And very few people likely said “I wonder what this wallet would look like as a ring; I would like to buy that.” 

Brand maturation can feel unnatural in the moment—both in terms of product expansion and positioning. 

But even on the latter point, luxury handbags are usually associated with heritage brands, like Hermes and Louis Vuitton. Except Louis Vuitton wasn’t “Louis Vuitton” until it became “Louis Vuitton.” It wasn’t luxury in the beginning. It was a solution to a problem (the ability to stack trunks).

The marketing and time (perhaps the more critical point) is what made it luxury.

Maybe I’ve spent too much time thinking about this, but it’s all because of a Taylor Holiday tweet from the other week: 

(As a side note: I believe this to be true of nearly all things, not just ecommerce, and it’s very much something I think about at Intelligems as it relates to our product evolution and expansion. In fact, I think, sometimes, we get similar “that feels unfamiliar for you” reaction for some of those moves.)

What Alo did—when viewed through this lens—is attempt to expand its market and fight off stalling growth. (To be clear: I am not saying their growth is stalling; I’m saying they’re attempting to make sure that doesn’t happen.) 

We could spend a bunch of time arguing over the execution (releasing luxury handbags), but that sort of misses the point of the strategy. And the strategy is sound.

If they don’t expand outside of their core product line (and I’m quoting Taylor here) “[their] TAM will shrink and [their] growth will stall.” This is an inevitability. It happens in all markets, and, in those markets, new products or innovations are launched to maintain price premiums or expand markets. They often end up looking weird and out of place at first glance (Why Nike, a running shoe company, start making basketball shoes? And why did the most famous of those basketball shoes turn into football cleats? And baseball cleats?) 

Maybe Alo ends up being wrong about demand for this whole bag thing.

If they are, they’re right where they were, anyway. But if they’re right? They’ve got a whole new market, a whole new growth avenue, and they’re fighting off inevitability until the next time they do something that feels “off.” 

Seems pretty right to me.