In a bold move to enhance customer engagement and foster brand loyalty, Coach has recently launched its coffee shop concept, strategically aimed at attracting Gen Z consumers and encouraging repeated visits to its stores. This innovative blend of retail and café culture is exemplified by signature offerings like the Tabby Cake, a dessert designed in the shape of Coach’s iconic Tabby purse, which serves as both a delightful treat and a clever marketing tool.
The inaugural Coach Coffee Shop opened in Jakarta, Indonesia, a market that has proven valuable for testing concepts due to its rapidly growing middle class and Gen Z demographic. Following this successful model, additional locations have sprouted across the U.S., including recently opened shops in Tinton Falls, New Jersey, and Austin, Texas. The latest addition, located in The Mills at Jersey Gardens—an outlet mall situated just southwest of New York City—marks the third U.S. location, with plans for a fourth shop set to debut in Woodbury Common Premium Outlets on October 3.
Coach’s Vice President of Global Food and Beverage, Marcus Sanders, emphasizes that coffee shops provide a more approachable price point than luxury handbags, making them appealing to younger customers who may not yet have the budget for high-end fashion. Observations from the Austin location reveal teenagers sharing Tabby Cakes while creating TikTok videos, a clear indication of how social media influences shopping behaviors among youth. This is a strategic move by Coach, as these teens are potential future customers, gradually cultivating brand loyalty.
The shift toward experiential retail is not unique to Coach; other luxury brands are similarly exploring dining options to create immersive shopping experiences. For instance, Ralph Lauren has established coffee shops and a restaurant, while Uniqlo has opened a café in its Fifth Avenue store. These initiatives reflect a broader trend where brands recognize the importance of creating a full experience for consumers, particularly the younger demographic that craves social and interactive shopping environments.
Coach’s recent growth has been impressive, particularly among Gen Z shoppers, who comprise a significant portion of the company’s new customer base. In the most recent fiscal year, Coach attracted 4.6 million new customers in North America, with nearly 70% of these belonging to Gen Z and millennials. This demographic shift has prompted Coach to adapt its retail strategies, such as removing the term “outlet” from signage to better align with the expectations of modern consumers who seek a seamless shopping experience.
Retail analyst Dana Telsey notes that Coach’s success stems from its ability to elevate its marketing strategies and produce collections that resonate with consumers, such as the popular Tabby bags. Furthermore, the rising prices of ultra-luxury brands have allowed Coach to position itself as a more accessible option without diminishing its perceived value. This balance of quality and pricing is crucial, especially as the company faces challenges from increased tariffs projected to cost Tapestry—a parent company of Coach—$160 million in the upcoming fiscal year.
The coffee shops play a pivotal role in Coach’s broader strategy to increase foot traffic and sales across its retail locations. By integrating coffee shops with stores, Coach not only enhances the shopping experience but also drives higher overall sales. For example, in locations featuring a coffee shop, Coach has reported double- or even triple-digit increases in sales. Customers enjoy the luxury of sipping their beverages while browsing, as noted by Desiree Aguilar, who traveled over an hour to experience the Tinton location after discovering it on TikTok. Her visit culminated in a purchase, reinforcing the effectiveness of this experiential approach.
In conclusion, Coach’s foray into the coffee shop business is more than just a trend; it is a strategic initiative designed to strengthen its connection with younger consumers and enhance the overall shopping experience. By merging retail with social spaces, Coach is not only catering to the desires of today’s shoppers but also laying the groundwork for sustained growth and brand loyalty in a competitive luxury market. As the company aims to evolve into a $10 billion brand, the innovative integration of lifestyle elements like coffee will likely play a significant role in its journey forward.
