The Skinny

Startups building online, direct to consumer brands are capturing increased attention among millennials. These startups focus on one price point in the beginning, capture an active user base with online content and then expand their offerings into a travel platform.

​​Millennials prioritize experiences over things in spending their incomes. This has resulted in them traveling more than older demographics. New travel brands such as Away or Roam are evolving into travel platforms.

Samsonite can garner significant market share among young customers by building an “Experiences Platform” which provides them with the tools needed to succeed in work and have fun travel experiences around festivals, weddings etc.

Competition landscape 

The luggage industry is rapidly getting disrupted by the online, direct to consumer brands. Typically direct to consumer brands have high marketing and customer acquisition costs, but the secret to the success of startups such as Away has been flat marketing costs due to word-of-mouth and organic Instagram posts.

Luggage Industry Revenue Breakdown

% of Projected Revenue

Away - 16.1% | Samsonite - 11% | Tumi 1.9%

% of Projected Quantity

Away - 5.3% | Samsonite - 7.9% | Tumi - 0.4%

Revenue Growth (%) in Luggage Industry

Q2 2018

Away - 10.28% | All Others - 1.66%

Startups like Away focus on one price point in the beginning, capture an active user base with online content and then expand their offerings into a travel platform. This is a playbook that has worked successfully for startups such as Warby Parker in eyewear, Asos in fashion and Casper in mattresses.

Strong Social Game

Several of the Samsonite portfolio of brands, especially Tumi, have a strong social game. However they still trail behind the startups like Away. This is primarily due to the following reasons from our analysis:

1. Samsonite’s social media efforts and user engagement is split across the portfolio of brands instead of one account that acts as a catch-all for all target audience.

2. Away’s social media efforts focus on one campaign - “First class luggage for coach prices”. This is a well crafted strategy for millennials who want superior and cool products for a price point they can afford.

3. Samsonite’s historic focus in their marketing campaigns has been on functionality which is hard to build a dedicated and engaged social audience around.

Lifetime Value

The lifetime value of a customer for Samsonite is smaller than fashion brands. A direct-to-consumer luxury shoe brand like M.Gemi can sell a woman a new pair of $300 shoes twice a year for the rest of her life. Everlane can sell a customer wardrobe updates every month.

By building a platform that helps young people associate luggage products with their personal and professional experiences, the lifetime value of each customer can be significantly increased.

Experiences

Millennials prioritize experiences over things in spending their incomes. This has resulted in them traveling more than older demographics.

By creating a platform to help millennials acquire the experiences they seek, the Samsonite portfolio of brands can embed itself deeply in their minds whenever they think about different travel experiences.

We asked 1733 millennials in the Pirates Network to describe their travel experience in the last year with one tag.

Moments

We recommend that Samsonite should build an experiences platform - Moments.

Moments should provide users with the tools they need to acquire more experiences - whether they are fun moments at festivals or growth moments at work or happy moments with health and wellness.

As young users grow in their daily lives by using the tools that Moments provides, it will become a membership worth taking pride in.

This will create a strong opportunity to craft a coherent social media strategy to attract a growing number of young customers to Moments

Different price segments

Over time, users of Moments can acquire similar experiences but at price segments that suit them thanks to Samsonite’s diverse portfolio of brands. This is where Samsonite can beat competitors - especially the new direct to consumer brands which focus on just one price segment.

As the user base of Moments grows, the Samsonite portfolio of brands can be marketed to the users by putting different brands in front of the users based on pricing segments and other demographic data, taking advantage of Samsonite’s breadth of portfolio offerings.

Making an impression at Coachella; Burning Man on a tight budget; Planning for Gov Ball and a week in NY; Accessories that help an associate in a law firm show she’s ready to make Partner; Repping your creative style in your agency; Making an impression when traveling to meet clients for a consulting firm - Moments provides its users with the tools to tackle these and more, while subtly placing the right Samsonite portfolio of brands in front of the right users.

MVP

 The first MVP for Moments can be in the Festivals space and if we can show that Moments can drive strong adoption among millennials and convert a significant portion of Moments users into Samsonite customers, then Moments can be expanded into other verticals such as work, holidays, fitness etc.

Connect with Influencers & Experts

Moments users can connect with experts who’ve been several times to the festival they’re considering attending. They can get real time advice on fashion tips, survival guides, travel plans, band info, make new friends and more.

Reeling them in

Stylists and festival experts help users prepare for their travel and in the process promote the Samsonite portfolio of products. The key to success here is to really provide users solutions that will help their festival experience and only promote the Samsonite products when they organically fit the price point/travel packing solution/demographic.

Multi Channel

Moments must be designed as a multi channel platform from day one. Users should be able to become members, access information, interact and share on Instagram, WeChat, Whatsapp, Moments web app in a seamless manner.

• Samsonite can arrest the growth of startups like Away and other traditional competitors by capturing a significant market share among millennials.

• To achieve this, we propose that Samsonite build an “Experiences Platform” - Moments - that provides young people with the tools needed to acquire the experiences they seek in their personal and professional lives.

• Festivals can be the first space that Moments can try its MVP in, due to the huge popularity of festivals among millennials.