What to watch: Luggage Market Gaining Steam with Consumers

In tandem with the travel boom, luggage is taking off and gaining altitude as a coveted — and lucrative — fashion accessory.

Once thought of as a sleepy category, the luggage and travel goods space has been woken up with a host of stylish new entries, technical innovations and buzzy designer collaborations, all fueled by the digital revolution.

“The luggage industry and travel as a whole has changed. In recent years, our customers have evolved to view travel as a lifestyle and their luggage and bags as an extension of their persona,” said Victor Sanz, creative director of high-end luggage maker Tumi. “The luggage industry is also becoming much more fashion-forward than ever before. Quality in luggage is the new luxury.”

According to The NPD Group, dollar sales of luggage in the United States rose 6 percent in the 12 months ended in May, with almost 80 percent of incremental dollars generated online. Online luggage sales grew 20 percent in 2017, on top of 15 percent growth the year before, making it the fastest growing accessories category online for both years, the market research firm noted.

The global luggage industry is estimated at $20.9 billion for 2018 up from $19.7 billion in 2017, a growth of 6.3 percent, according to market research provider, Euromonitor International.

European luxury brands, some born in luggage, are shining a brighter spotlight on the category, while a host of newcomers are piling into the category. Many are direct-to-consumer brands that are disrupting with new materials, smart capabilities and innovative brand strategies that foster a sense of community around travel experiences. Communication strategies now center on social media, blogs and podcasts.

“Luggage has become an accessory now,” said John Sencion, cofounder of Flight 001, a luggage and travel goods retailer that has been in business for 20 years. “Now it’s become Instagram-worthy, and brands aren’t unknown anymore. The market is more competitive.”

While Flight 001 makes part of its business with private label-branded Flight 011 luggage sold in its stores, e-commerce and various wholesale partnerships, Sencion noted that the Internet has changed the rules. “Our wholesale business was half our sales back in 2014, but you cannot just be making product for a few stores. That old model no longer works. Our stores now are a place to connect to the consumer, but you can build the same connection online. The consumer is a lot more savvy.”

“With the rise of e-commerce, consumers are able to search for precisely what they’re looking for and find the best deals available,” said Michele Marini Pittenger, president of the Travel Goods Association, a U.S.- and membership-based organization for the travel goods industry that organizes and sponsors The International Travel Goods Show. “A large component of today’s travel goods consumers is focused upon value, and understandably so — there’s a vast array of quality products available at reasonable price points.”

At the top tier of the market sit offerings from several heritage luxury brands well known for luggage, including Goyard, Gucci, Bottega Veneta, Prada, Louis Vuitton and Rimowa, the latter two controlled by LVMH Moët Hennessy Louis Vuitton.

Vuitton recently commissioned a traveling exhibit, “Volez, Voguez, Voyagez,”  to tell the brand’s story through the lens of travel and exploration. Luggage pieces have been sent down the runways of both women’s collections artistic director Nicolas Ghesquière as well as newly appointed men’s designer Virgil Abloh. And in 2016, Vuitton introduced Horizon Luggage, a new range of rolling trunks designed by industrial designer Marc Newson, that is part of a larger offering of travel pieces.

Rimowa recently unveiled a new visual identity, a revamped product line and an online makeover to coincide with the brand’s 120th anniversary. Known for its grooved aluminum cases, Rimowa has also made limited-edition models with Supreme, Off-White and graphic design duo M/M Paris.

In today’s marketplace, aesthetics is a driving factor, even as TSA luggage guidelines to meet airline requirements have shifted fortunes in the past five years as several direct-to-consumer luggage startups have come to market. Some, including Away, Arlo Skye and Paravel, are thriving, each carving out a niche in the market using tools like social media to build a community around the “experience of travel,” while brands Raden and Bluesmart, each with a range of battery-powered tech features like GPS capability or built-in digital scales, have folded.

“When airlines changed regulations about what types of smart luggage they would allow on board, especially that the charger that was within the suitcase had to be removable and be able to be popped out before you board, brands that didn’t have this as an option suffered dramatically,” said Arlo Sky cofounder and chief executive officer Mayur Bhatnagar. “With some brands, you needed a screwdriver to remove the battery or open the case to remove it and it just wasn’t user-friendly. “

Luggage by Arlo Skye

Luggage by Arlo Skye.  Courtesy

Bhatnagar, a former Louis Vuitton retail executive, founded smart suitcase brand Arlo Skye along with former Tumi executive Denielle Wolfe and industrial designer Mauricio Issa Llano in 2015. Not aiming to be the cheapest, its cases retail in the $450 to $550 range.

“In the beginning, we launched with an aluminum alloy suitcase and we wanted to produce it at a lower price by not selling in stores, but the feedback we got was that it might be a bit heavy. We took that feedback and we created a polycarbonate version that is lighter and cheaper,” Bhatnagar said. “It has quickly become our bestseller in the last four months.”

Luggage by Away

Luggage by Away.  Evgeny Popov

Luggage start-up Away began in 2016 with just four employees, selling cases that retail for $195 to $295. The brand was founded by Jen Rubio and Stephanie Korey, two former Warby Parker executives, and it has more than 150 employees.

“Steph and I talked to hundreds of people before we even designed a prototype. We quickly found that the market was in need of a shakeup. Luggage at the time was either cheap but poorly made, or it was more expensive than the trip you were planning to take it on,” noted Rubio.

Away has since moved on from the traditional direct-to-consumer, online-only model, and now operates four stores, one each in New York, Los Angeles, San Francisco and Austin, Tex., and is looking to take some ownership of the media space with its Here magazine, launched last year, and a podcast that discusses all the parts of the travel experience.

“Like all things at Away, our media division was born in response to something our community had been asking for,” Rubio noted. “People had come to associate our brand with better travel, so much so that they were reaching out to our customer experience team or writing to us on social media to ask for our travel tips and recommendations. We recognized a white space in traditional travel journalism and believed we could create something with a unique, Away point of view.”

Luggage by Paravel

Luggage by Paravel.  Courtesy

The travel “experience” was also a defining part of Paravel founders Indre Rockefeller, an American Vogue veteran, and Andy Krantz’s vision for their luggage brand Paravel. “Paravel is about bringing joy to the travel experience. From the outset, we were product-obsessed founders with a goal of bringing joy to the travel experience for as many people as possible.” says Rockefeller.

“Our bags are sewn by hand and our fabrics come from the same mills that supply some of the world’s most prestigious luxury brands and yet our prices are a fraction of theirs. When it comes to our relationship with our customers, the direct-to-consumer model gives us the ability to speak directly to our customers across various platforms and then respond quickly,” Rockefeller explained. “Conversations with our customers have shaped everything from content, to product development and production, to merchandising.”

The brand’s luggage retails at $285 to $325 and its recent collaborations with retailers J. Crew and Net-a-Porter sold out in 24 hours, according to Krantz.

“There is a true opportunity and we are just getting started,” said Bhatnagar. “Luggage in the U.S. is a $22 billion market and the premium market accounts for $7 billion. There’s definitely space for multiple winners in the marketplace.”