Individual Write Up: Samsonite Case Study

The digital revolution has sparked rapid innovation in the luggage market, as changing consumer perceptions now classify travel as a lifestyle, and view luggage as a compliment to one’s aesthetic. The $20. 9 billion industry is fueled by uncharacteristically high international travel growth, and supported by increasing consumer spending and discretionary income (appendix A & B). Luggage is now a stylish accessory, meaning consumers demand high quality, fashionable products, inspired by luxury designs. Within the United States, changing purchasing patterns, new product offerings, technical innovations, and creative marketing strategies have enabled brands to not only sell products, but embody a lifestyle, community, and experience.

Purchasing pattern analysis emphasized the need for direct-to-consumer sales, which bifurcated revenue strategies into e-commerce channels and company owned brick-and-mortar locations. By focusing on the consumer, a market historically limited by price and quality has grown to develop a spectrum of products, including a sub-sector that incorporates technological features, including GPS tracking, into traditional luggage. By adapting to the market and owing their brands, companies now utilize media to show the experiences they create through the communities they foster, while providing additional consumer insight through blogs and podcasts. Samsonite has evolved by employing an Omni-channel sales approach. The Company acquired eBags to bolster its e-commerce platform, and to serve the information driven, value seeking customer. It selectively expanded its retail presence, opening 127 stores in 2017, to use customer interaction to enhance brand relationships. Samsonite employs ten brands to comprehensively reach all sub-sectors (appendix C), and strategically position itself to capitalize on upside potential within the U. S. Handbag, Luggage, and Accessory market.

The Samsonite brand is the Company’s Cash Cow, known for offering an array of products to the common traveler. The Brand generated 47. 4% of revenue in FY17, and a modest 5. 0% CC PoP growth through 1H18 (appendix D & E). Tumi, Samsonite’s Star, addresses the premium lifestyle market for the luxury business and global traveler. The Brand represented 19. 4% of FY17 revenue, and had CC PoP growth of 16. 6% in 1H18. Samsonite’s striving to develop American Tourister (“AT”) into a Star. The Brand’s FY17 CC PoP growth of 24. 4% shows potential, but its capital demands and revenue variability classify it as a Question Mark. The remaining U. S. product lines reach a variety of niche markets, but with low growth and revenue weights, they are classified as Dogs. External forces have increased market competition, putting more pressure on firms to meet product attribute requirements (appendix F). Outside of Samsonite brands, AT competes with Briggs & Riley, Rimowa, Travelpro, and Delsey to provide luggage that meets consumer durability, wheel-ability, material construction, size, and technology requirements (appendix G). Delsey’s price point, target market, and product suite directly align with AT, making it the closest competitor. The Brand outmatched AT by providing a more durable suitcase with larger design optionality. While Delsey failed to meet technology component requirements, its stylish and innovative product line position it to grow revenue.

After losing traction in 2016, AT launched a new branding campaign to position itself as a modern, international luggage provider, targeted at fashion-forward millennials. AT used Portuguese soccer superstar Cristiano Ronaldo, and Virat Kohli, an Indian cricket phenom, as rebranding ambassadors. By harnessing their vibrant personalities, prominent personal brands, and massive followings, AT associated their brand with youthfulness, subtle sophistication, and the millennial persona. The campaign’s “Bring Back More” initiative, and “Trusted all over the world” tag line (appendix H & I), emphasized the brands functionality, showing its durability, practicality, and performance. The rebranding enabled AT to develop a unique selling proposition, as seen in appendix J. While AT’s rebranding was important, Samsonite’s CEO emphasized the importance of female focused products. The Company’s Tumi and Lipault brands spearhead the initiative, but the AT brand needs to develop to become relevant to women. AT needs to explore consumer insights from market research including: who makes luggage purchasing decisions, which products are most desirable, what product attributes are the most important, what is the consumer’s willingness to pay for products, where consumers gain information, and how often products in this market are purchased by the same customer. The research methods needed to collect this data include customer surveys to decode customer opinions and feelings, use data mining to uncover historical sales trends, and implement in store observation and eye-tracking analysis to understand what catches consumer’s attention.