How the Telfar bag is creating new rules for luxury with classic sales tactics : The Indicator from Planet Money 3... 2... 1... GONE? Already? The Telfar Shopping Bag's been considered the "it" bag the last few years, if you can get your hands on one. It's also making big fashion statements by redefining luxury and accessibility in the fashion world.

Securing the (Telfar) bag

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

WAILIN WONG, HOST:

Jamila Huxtable, INDICATOR producer.

JAMILA HUXTABLE, BYLINE: Hey, Wailin, what's up?

WONG: Hello. Well, today we are going to talk about this bag that you are obsessed with. It is a designer bag. And I know you were obsessed with it because you talk about it all the time.

HUXTABLE: Wailin, why are you putting my business all out there like that? This is not OK. But, you know, this is all true. Today we're going to be talking about the Telfar shopping bag from the luxury fashion brand, Telfar. People have been calling this bag the it bag for a couple of years now, and I've actually been waiting for one for almost three years. And you know what? I finally got one.

WONG: Three years? You have been on a journey.

HUXTABLE: Yeah. And, you know, I'm not alone in my quest to get one of these bags. This is Melissa Yap (ph). She's a student at Pace University in New York.

MELISSA YAP: Oh, my gosh, Telfar. It's so hard to get a Telfar bag.

HUXTABLE: So last year, she set her alarm early one morning because Telfar was putting some of these bags on sale on their website, all at the same time. And one thing to know about these bags - they sell out in minutes.

YAP: I woke up at, like - like, three minutes before, like, 8:57. I was like, this cannot be that hard. I'm really competitive. I like to win.

WONG: She clicked on the Telfar bag she wanted and pressed add to cart. But before she could hit purchase, it was sold out.

YAP: And I was really frustrated that I didn't get it.

HUXTABLE: I know the feeling, Melissa, but, you know, this is not your typical it bag. It's not like a Birkin or a Prada bag that can sell for thousands of dollars. The Telfar bag can actually cost anywhere from about 150 to 250 dollars - a lot less.

This is THE INDICATOR FROM PLANET MONEY. I'm Jamila Huxtable.

WONG: And I'm Wailin Wong. Today on the show - how this simple handbag is shaking up high-fashion industry norms by using some old sales practices and successfully branding itself as a luxury bag for the people.

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WONG: Before we talk about the bag, let's talk about the man behind it - Telfar Clemens.

HUXTABLE: Right, Telfar Clemens. So a little bit about him - he's the son of Liberian immigrants. He spent most of his early years growing up in New York and Maryland. He's Black and openly queer. And he's always seemed to embrace his outsider status. He refused to go to fashion school.

WONG: We reached out to Clemens. He declined to talk to us. But earlier this year, he did speak to How I Built This, an NPR podcast on Wondery.

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TELFAR CLEMENS: I love fashion, and that's why I never went to fashion school 'cause I knew once it was a task that I had to do with a certain grade that I would get from someone based on doing something that they liked me doing - I was like, no, I want to figure it out on my own.

WONG: His brand Telfar actually did brand collaborations with companies like White Castle and Kmart - not exactly what you would associate with high fashion.

HUXTABLE: Right. I really don't go to Kmart to, like, strut my stuff or anything. But, you know, it is with Kmart where we see the first iteration of the Telfar bag. It's a small, kind of boxy-shaped bag with two sets of handles. It's made out of vegan leather. It's got a T and a C on the front of it for Telfar Clemens. And as his operation is getting bigger, he decides he's going to relaunch the Telfar bag - this time in more sizes and fun colors. This year we got colors like corned beef and margarine.

WONG: OK. So margarine I can definitely picture. It's, like, a - probably a pale yellow. What does corned beef look like?

HUXTABLE: I would say a fleshy pink, maybe?

WONG: (Laughter).

HUXTABLE: It goes with a lot of things. You'd be surprised.

WONG: Sounds like a true neutral.

HUXTABLE: And then, in the summer of 2020, it really takes off during the Black Lives Matter protests. Shelby Ivey Christie is a fashion historian.

SHELBY IVEY CHRISTIE: We saw a lot of people taking retailers to task for not always stocking enough Black designers in their wholesale orders, not giving them the same care and attention as other designers.

WONG: So this bag made by a Black, queer designer becomes not just a bag, but a symbol of support. Everyone from your siblings to celebrities wants one.

HUXTABLE: They did. It makes the celebrity circuit - Beyonce, Selena Gomez, Dua Lipa - all your favorites, Wailin, are photographed rocking the bags.

WONG: The bag gets nicknamed the Bushwick Birkin - Bushwick, for Brooklyn's mostly working-class neighborhood where Telfar's fashion label is based, and Birkin, as in Birkin bag, the iconic it bag made by the French luxury brand Hermes.

HUXTABLE: Speaking of the Birkin, we need to talk about the traditional rules of how it luxury bags operate before we get to how Telfar is breaking some of them.

WONG: Right. They're pretty simple. Shelby Ivey Christie says there are basically three rules for something to be considered luxury - price, materials and artificial scarcity. Price and materials are pretty straightforward. A Birkin bag is often made of exotic leathers, and on average, one can run you about $60,000.

CHRISTIE: To turn the volume up on the price and constrict the amount of people who can actually have it to fuel the hype and the clout.

HUXTABLE: The hype and the clout - and then there's artificial scarcity. Make a limited number even though you could be making more. It adds, you know, exclusivity - that look at me, I'm special. I managed to get one of these fancy bags.

WONG: OK. So that's the old school way of doing luxury. But the Telfar bag is different. He wanted to find a way to toe the line between being a luxury brand, but still being accessible. So he turned to two rules of his own.

HUXTABLE: Rule No. 1 - bag drops. That is, putting a set number of Telfar bags on sale at the same time. Usually, it's a new color. And it's announced without a lot of notice, a few days before. Drops are not exactly a new thing in fashion, but they have become a more popular sales model for businesses to heat up the hype. Ana Andjelic is a luxury brand strategy executive and has studied Telfar's business model.

ANA ANDJELIC: So the drop model release is products that come in a limited number, so rarity is key here, and knowing - being in the right place at the right time.

WONG: Rarity is key, but technically, anyone with an internet connection, some time - and yes, a couple hundred dollars - could potentially get one. So it turns shopping into a competition, a game for Telfar bag lovers like Melissa.

HUXTABLE: Do you enjoy stressful shopping?

YAP: I like shopping. I also like winning. When you put winning and shopping together, I like both of those things.

HUXTABLE: Melissa even joined a Facebook group dedicated to sharing tips for a more efficient way to get a Telfar bag, things like creating an account on Telfar's website, so it already had your address and billing info, so you didn't have to waste time typing it in.

WONG: And it isn't overnight, but eventually, Melissa tries again. She selects a bag, a black one this time, adds it to her cart. And this time...

YAP: I was like, oh, my gosh, I got it. I was so excited. I couldn't even believe it for like 30 minutes.

HUXTABLE: I couldn't believe it, either. And, you know, Melissa, she was pretty lucky to cop a Telfie (ph) that day. At the same time, bots were reportedly buying bags in bulk and reselling them on sites like eBay for almost twice the price.

WONG: This was beginning to hurt Telfar's customer base. Enter rule No. 2 - the preorder. Telfar branded their preorder sales the Bag Security Program.

HUXTABLE: Yes, the BSP. So it's essentially an extended drop. The Bag Security Program happens twice a year. It's for a couple of days, and customers can buy as many bags as they want at the original price, but only during the length of the program.

ANDJELIC: It's basically, you pay for it, you order it, and you get it when it's ready. They're not increasing prices. They're just increasing volume.

WONG: So this preorder program essentially served as a loan from customers to the company Telfar to make the exact amount of bags ordered, no overproducing. Ana says this allowed them to maintain customer loyalty and still stick to their brand's motto - not for you, for everyone.

ANDJELIC: It introduced a new status symbol that is not based on differentiation - I'm better than you - but it's based on belonging - I am like you.

HUXTABLE: Now, we should say that Telfar still produces a lot of higher-end clothing, but the Telfar shopping bags now make up a majority of the company's revenue. And it really shows how important the bag is to Telfar's brand - and some would say the world of luxury fashion - because of what the bag has come to represent. Does something have to cost a lot and be super exclusive to be considered luxury? The marketing behind the Telfar bag is saying not really.

WONG: So, Jamila, I got to ask you - do you feel like you belong when you take your bag out into the world?

HUXTABLE: Out in the world? Wailin, I have a cobalt blue bag. It stays in a dust-proof case in my closet. It's not coming out.

WONG: (Laughter).

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HUXTABLE: This episode of THE INDICATOR was produced by Taylor Washington and Jess Kung, with engineering by Robert Rodriguez. It was fact-checked by Catherine Yang (ph). Viet Le is our senior producer and helped edit this episode. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.

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