'The Handbag Effect' — by Vanessa Friedman

Her above-titled essay appeared in the May 7, 2007 Financial Times.

Long story short: "If you can take a basic item, inject a dimension of real design and then regularly change that design, you transform the item from a utility to an object of desire."

Here's the piece.

The Handbag Effect

A few years ago Floriane de Saint Pierre, a Paris-based headhunter specialising in luxury and fashion, began to notice something strange. Some unlikely companies were coming to her in search of candidates to fill the position of creative director — the person in charge of image for a brand, from product design through to marketing, store visuals and so on. Instead of dealing with the traditional fashion houses that had invented the role, she was fielding approaches from luggage brands, tights makers, silverware specialists — even bed linen companies.

It was around the same time that Silas Grant, a Central St Martins-trained consultant working with fashion brands such as Buddhist Punk and Tsubi, was approached by Nokia to join their design team; they had been specifically looking for someone to lift the trend content of their phones. And it was then that Guy Leymarie, the new chief executive of De Beers' jewellery house, decided that it was time to hire a creative director – despite the fact that jewellery houses did not normally have creative directors and, indeed, disdained the idea. "For me, it's an essential part of any company that makes a product," he says.

It is increasingly apparent that a strategy long seen as specific to the fashion world has filtered out into the world of product development writ large, changing the way such companies and their consumers behave. Call it the handbag effect: the realisation that if you can take a basic item, inject a dimension of real design and then regularly change that design, you transform the item from a utility to an object of desire.

Michael Boroian, managing partner at Sterling International, another luxury search firm, notes that design elevates an object from the category of commodity to the category of lifestyle component — and that changes the purchasing pattern. It moves from being a pragmatic investment to an impulse driven by irrational desire, whether it is a necklace, a suitcase, a china setting, a phone, a car or a washing machine. As a result, a new career path has opened up to professionals in the fashion world, one that will have real repercussions both within and without.

"Some of the creative director salaries are really enormous," says Daniel Naftalin, a member of the new fashion and luxury group at the London law firm Mishcon de Reya, a group formed recently specifically because of the spread of the fashion world. "They can be on a par with the CEO, or even more. But because they're often not on the board, they're often not declared, and people don't know."

Why the new creative directors are being paid so much, and why they are suddenly so popular, has to do with the evolving nature of consumer demand and the sheer amount of stuff available. As companies diversify from fashion to homewares and homewares to fashion, competition increases. As a result, says Lisa Black, managing director at the New York-based brand consultancy Robert Burke Associates, "even the most basic product needs a point of view".

"Design drives sales of a brand," says Robert Burke, chief executive, pointing out that when designer Vera Wang, who is known for her bridal wear, became a creative director for Serta mattresses (mattresses being often purchased after a wedding), "sales went up dramatically. I mean, who needs a new teapot? If it works, that's all you need. But Michael Graves designs one" — referring to the architect's Alessi kettle — "and suddenly you want one".

The point at which a company understands this, says Ms Saint-Pierre, is when they come to her. "It's always the president of a company," she says, "who has suddenly realised there is a way to have an accelerator for added value."

This statement is reflected in buying patterns, especially of the wealthiest tier of consumers. According to Ledbury Research's recent High Net Worth report, which looked at the average annual spend of wealthy households in the US (defined as those with a household income of over $200,000), those polled spent more on entertainment appliances than women's clothing, artwork or jewellery, and more on household appliances than computers or men's clothing. They spent the most on home furnishings. All of which suggests an above-average rate of redecoration.

"Products need constant rejuvenation; it's what people ask," agrees Thierry Oriez, chief executive of Christofle, the silverware and home accessories company, which hired design writer Brigitte Fitoussi as creative director in 2005. The company now launches two new collections each year and Mr Oriez says the rhythm is accelerating. Similarly, though Mr Grant says "our phones are built to last five years", Nokiabrings out approximately 50 a year — "a significant increase over five years ago," according to Susan Allsopp, spokesperson for the brand.

It is increasingly clear that if you do not provide such design-led newness, you risk losing significant market share. Motorola discovered this earlier this year when profits fell — partly, according to Casey Keller, their chief marketing officer, because of the company's inability to capitalise upon and renew its design-led Razr. "We started thinking about the Razr as a product," he told this newspaper in March. "Now we know it is a franchise and brand."

Beyond driving sales, creative directors can also transform a business. This was the thinking behind Tumi's appointment of David Chu as a creative director last January. Though the luggage company, founded in 1975, had been doing fine with its tough black suitcases, they had begun to find their identification with that sort of hard-edged practicality limiting. Laurence Franklin, chief executive, wanted to redefine the brand as equally "accessory and engineering". Since his appointment, Mr Chu has not only redesigned the product but feminised the stores by using materials such as limestone, lacquer and ebony, and launched a new advertising campaign.

"From a global brand point of view, we felt we could significantly increase our power in the business by increasing the creativity," says Mr Franklin.

It was fashion's realisation of this that produced the first contemporary creative director: Tom Ford, at Gucci. Indeed, it was only really in the late 1990s that the handbag phenomenon actually began, thanks to Mr Ford, Miuccia Prada, Fendi with its Baguette, and Marc Jacobs at Louis Vuitton with his limited editions (other brands now associated with "it" bags such as Chloe and Mulberry came later). Prior to these companies changing bag styles with abandon every season, and thus creating a demand for them, most women saved to buy one or two "good" handbags and then kept them for life. That such an idea now seems quaint simply points to how quickly we have absorbed the transformation of commodities into consumables.

It has been an exponential transformation. According to Ms Saint-Pierre, it was but a short jump from traditional fashion houses to accessories brands such as Coach, which led to luggage and jewellery, which led in turn to homewares. Now there are fashion insiders at the top of, among others, Penhaglions (perfumes and creams), Samsonite (suitcases) and Wolford (tights).

"Swarovski [the crystal company] really sped things up when it started collaborating on chandeliers and lights with designers," a project that began in 2002, notes Ms Black. Indeed, businesses often dip a toe in the design water via collaborations such as the various mobile phone and car projects (Motorola and Dolce & Gabbana; LG and Prada; Giorgio Armani and Mercedes Benz; Maserati and Ferragamo) before wholeheartedly embracing the creative director.

After all, there are risks involved, the most notable being over-dependecy on the creative persona. Part of the point of having a creative director in the first place is the quick route it provides to associating a set of human values with products, which in turn creates customer loyalty, but there is a fine line between enhancing a brand and overwhelming it.

One factor militating against this is that many creative directors retain their own label while they work for another brand: Derek Lam, creative director for luxury footwear specialist Tods, still has his own eponymous fashion line; Tumi's designer, David Chu, still owns his company, DC design International, and runs the clothing brand Lincs. For them, part of the appeal of the job is the fact that it provides real cash injection into their own business without cannibalising their imagination.

"It's gotten harder and harder to make money in the fashion world," points out Ms Black, one of the reasons that in the 1990s so many designers, from John Galliano at Christian Dior to Marc Jacobs at Louis Vuitton, took second jobs at other fashion companies. But this has proved increasingly unattractive, as collections proliferate (a designer working for two clothing brands can be creating six to ten collections for each a year) and the demands on the designer's vision get ever greater. The usual result is two lines that look similar. By changing one of those houses to an accessories or technology company, says Mr Chu, "you use a different muscle. They become complementary". At the same time "your Ebit [earnings before interest and taxes] goes up. It's an interesting way to finance a business", says Ms Black.

"I don't see it slowing down anytime soon," says Mr Burke. "There's still a lot of opportunity in real estate, technology, automotives ...."

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Wait till you see what my crack design team™ has been busy cooking up out back in the skunk works for the past couple years.

On second thought, maybe we'll take a rain check.