This is part of STYLE’s Inside Luxury column. The year 2020 has been, to say it casually, an unusual one. When social gatherings are reduced to a minimum, when shopping happens mainly online, when restaurants and bars are closed in many places, and when many of us stay indoors to avoid exposure to the coronavirus – who needs designer handbags that can cost a five or even six-figure amount in US dollars? View this post on Instagram A post shared by Tod's (@tods) on May 25, 2020 at 12:01pm PDT After months in lockdown, Lou Stoppard wrote in The New York Times about “The Phantom Handbag”, suggesting that the previously ubiquitous and unpractical small handbag may be a thing from the past. The replacement: larger, more practical tote bags, cross-body bags and other more practical accessories. Buying guide: Which Hermès bags will go up in value? In particular, as those who live in large cities like New York, London or Tokyo increasingly rely on walking or cycling for their commute to avoid packed and potentially virus-laden public transport, a bag seemingly needs to perform rather than look good. View this post on Instagram A post shared by BV UNIVERSE (@bv_daniel_lee) on Aug 21, 2020 at 4:54pm PDT Almost all previously handbag-focused luxury brands have reacted and launched bags that combine practical and stylish elements. Bottega Veneta stirred up the market with the launch of the Squash Tote, priced at US$5,090. Louis Vuitton launched the Crafty Onthego GM, priced at US$2,860, as part of its capsule collection for autumn 2020. View this post on Instagram A post shared by LuxeHunt / Deal Hunter (@luxe__hunt) on Aug 14, 2020 at 1:17pm PDT The website highlights the everyday aspects of the bag: “As useful on workdays as weekends, this stylish tote’s boxy shape means lots of room inside for office files and a laptop”. The focus is clearly on the practical aspect, allowing us to combine work and play. So, is the more impractical but fancy “It bag” category dead? My prediction: no. On the contrary, trends in one direction are typically followed by trends in the opposite direction. Consequently, in the autumn season, we see luxury brands featuring impractical bags, like Gucci’s Mad Cookies top handle bag, a small light metal bag inspired by a classic cookie can, for the new MX collection. Impractical, almost absurd, this new “It bag” is a clear statement piece without any distinct function. Get structured with Kylie Jenner: 5 handbags that prove soft bags are out But a statement bag, especially a rare and limited-edition piece, has a different function. The real value drivers of these items are their hidden luxury aspects. My research, first published as part of my doctoral thesis “Decoding Luxury” in 2008, indicated in a quantitative study that associating with a luxury brand enhances self-perception and the perception by others. One finding was that being associated with a luxury item can make a person be perceived as more attractive, and hold a higher degree of sophistication and expertise. View this post on Instagram A post shared by Bagsionista (@bagsionista) on Aug 21, 2020 at 12:25am PDT This is astounding. It suggests that a handbag can have a similar effect as plastic surgery or a degree at Harvard. These hidden aspects of luxury are still underestimated. It is critical for brands to develop a clear understanding of how much value the hidden aspects of luxury generate. How to buy a US$200,000 second-hand Hermès Birkin handbag The price point of US$3,000 for the Mad Cookies bag indicates that these value components are extreme, allowing brands to tap into them for pricing, rather than for the product itself. View this post on Instagram A golden cage minaudière, constellated with strass, is a nod to a miniature birdcage found in Gabrielle Chanel’s apartment. The 2019/20 Métiers d’art collection is now in boutiques. #CHANELMetiersdart #CHANEL @Le19M #Le19M @Maison_Lemarie #MaisonLemarie @Goossens_Paris #Goossens @MelodieMcDaniel @Mona_Tougaard A post shared by CHANEL (@chanelofficial) on Jul 15, 2020 at 9:00am PDT Extreme value also explains why “It bags” won’t disappear. They position you socially, and might even make you seem more attractive and smarter. The Chinese TV drama Nothing But Thirty recently sent shock waves through the luxury world with a scene where one of the protagonists carried the “wrong” bag within her social cycle. It was “just” a US$9,000 limited edition Chanel bag, instead of the Hermès Birkin and Kelly bags everyone else was carrying. Due to the faux-pas, the protagonist was cut out from a social media post. The girlfriends did not want to be seen with someone wearing the seemingly “lesser” bag. How to dress for social distancing in the countryside This underscores a difficulty in choosing the right “It bag”. You have to know which bag to wear in which situation. The right brand at the right place signals a lot about you. It determines how you see yourself and how others perceive you. In a recent luxury masterclass, one of the female participants consequently stated that she wears her bag mainly as a positioning signal to other women. In this context, the “It bag” is here to stay. Want more stories like this? Sign up here . Follow STYLE on Facebook , Instagram , YouTube and Twitter .