Function Versus Fashion

These are two different bag categories, that also valid with other fashion items. They can come up in one out of the two, or both. Let's review the difference, how we take them into account, and how to combine the two.

FASHION BAGS
Fashion bags (or other fashion items) basically include giving the eye a treat. They're not about what's comfortable, not what we would take out with us to go to the mall. They're all about thinking outside the box. The more original and even outrageous, the better. It's about making a statement.
Fashion bags can express your feelings, your visions, your wild imagination. They're art. You can do whatever you want with them. Therefore, they can be made from any material you want. From plastic to music discs. Anything goes. They're show bags.
For it to be fashion bags you must think outside the box. You have a better chance to get noticed if you make a fashion statement in your design. You might be inspired by the hungry children in Africa, and like in any art, you can make that into a piece of art. The situation of that subject can give you ideas for the design, the colors, the material, etc.
With clothes, they have "Couture". Those are usually the clothes you'd see in the biggest fashion shows, on the catwalk. At times, you'd see out bursting dresses that no woman in the world would wear in the streets or just for the mall. On the other hand, those are clothes that are made to order. Those are the clothes you will not find in the stores, and they usually cost A LOT. The biggest designers make them. And you'll see them every year in the season's collection of the designer.
When I mean fashion bags I don't mean the latest fashion trends of bags, or the high class bags. I'm talking about a show. Making this kind of bag is for show. Sometimes they're not even wearable. Sometimes they don't even look like bags. That's why you can go crazy with them, and give your imagination freedom.

FUNCTIONAL BAGS
With clothes the right term is "Ready to Wear" (RTW). These are the clothes you will see at the stores, and you do get to buy them. They can come at any price. And if this term is for clothes that you can wear, with bags it's the bags that are "ready to carry". Now, that's not a real term as far as I know. But just to make it clear.
They're all about comfy and functionality. They're useful. They're easier to carry, and they're the ones we want to take with us to the same mall we wouldn't take the other kind of bags to.
Functional means things like: pockets and their position, comfortable straps (more comfortable to use with an adjuster, or long enough to sit nicely, they're material, etc.), better closure, the size, the shape, if it's got things like feet, zipper pull, and more and more. You get the point.
In this kind of bags, the functionality will come first. We think about the uses we will do with them and then the rest. We could make a list of the things people usually put in their bags when they go out (that's why I posted that other post earlier, showing you pictures of what's in people's bags). It's important for us to know what will go in there in order to know what functions we want to do in our bag design. For example, most people carry cell phones in their bags. So it might be a good thing to make a pocket that will fit a cell phone. Or if people always take keys with them, it might be a good idea to place a strap inside the bag so you could easily reach in, and find the keys easily. And of course the size of the bag is in the function category. If you take your entire house with you when you go out, or if it is a bag for dropping by the neighbors' house, size would matter a lot.
And colors/fabrics are important too. In the sense of if we like a certain color and we would love to carry it around. It's always nice to carry something you like to look at, and enjoy taking with you. And if it's winter time, the best functional thing you could do is using water proof materials, interior and/or exterior.
There are many many details in a bag that can make it more functional. It all depends on your use of it, and your needs.

COMBINE THE TWO
The fact that there are functional AND fashional bags doesn't mean it's supposed to be one of them only. There could be a bag that is more for show but it's definitely wearable, and there could be a bag that is very unique, even in its material (even if it's plastic) that can be carried around and get many responses. If you can combine the two, go all the way with it! (Again, when I say fashion bag I don't mean it looks high fashion, beautiful, expensive or super elegant).
In my opinion though, a bag that has both must be functional first, then fashional. Like, we have the basic data on the bag we want to make, and we know it's gonna have, say, many many pockets for a cell phone, keys, pens, etc. then we will make the pockets, that we already know we will, then we can think about how to make it more fashional and super original that screams 'FASHION'. So we have pockets, but in a fashion kind of way. For instance, we can make the entire bag from regular fabric, but the pockets will be made from a few zippers combined with each other (zippers play has been seen before in fashion, trust me). Just take a regular element that is very useful, and think how to make it more Fashion like.

Now all you have to do is think hard what you want to do and make it right!