Why Are So Many Luggage Startups Shutting Down?

With surprising news to some, three popular luggage startups — Bluesmart, Raden, Trunkster are now no longer operable. Why? What did these brands do wrong? Could this have been avoided? I’m no wizard nor can I pinpoint exactly what happened but below is my input.

Bluesmart was a brand known for their tech-integrated carry-on’s. Their first generation model was awarded the Red Dot Best of the Best Design Award. They raised more than $4 million in pre-orders through two crowdfunding campaigns on Indiegogo.

On May 1, 2018, Bluesmart announced they would be shutting down operations.

In November 2016, shortly after luggage brand Raden launched, their carry-on was picked up by Oprah’s list of Favorite Things. With roughly $5 million in venture funding, they were getting lots of attention with placements in popular media outlets including The Wall Street Journal. Vogue even mentioned: “If Rimowa and Apple had a baby, this is what it might look like.”

On May 17, 2018 Raden posted on their homepage that they will no longer be operating business.

In 2014, Trunkster grabbed the internet by storm when announcing a carry-on luggage without zippers. They sold over $1.3 million in pre-orders through their Kickstarter campaign. Afterwards their founders appeared on Shark Tank and landed a deal on air with Mark Cuban and Lori Greiner.

In the past 24 months there have been a plethora of Trunkster customers complaining, demanding refunds, and seemingly the company is no longer fulfilling orders nor do they seem to be continuing operations.

So what went wrong? Why did these three brands with so much attention from the media wind up closing shop?

Well, first, selling luggage online is tough. Why?

  • Consumers don’t gravitate to luggage as they do with more frequent purchases such as shoes, handbags, sunglasses. People buy their luggage and they usually don’t purchase again until a few years pass.
  • Luggage is bulky, which equates to high storage and freight fees.
  • The cost to acquire new customers and have them convert with a luggage purchase is an expensive one. Imagine spraying advertising dollars* everywhere and only speaking to 5% of the audience that’s in the market for luggage.
  • Luggage is boring to most people. People care about looking good but when they travel once or twice a year they just want a bag with a zipper to hold their clothing at the lowest cost possible.

These are all realities to any luggage brand. However, seemingly these startups surpassed these hurdles. They acquired massive amounts of customers and sold millions of dollars of product. So how could this have happened?

In my opinion, it’s due to a notion of customer’s expectations of what was marketed to them versus what they actually received. I’ll explain.

Making a purchasing decision online is very different than purchasing in a physical store. Online, there’s this whole brand story that’s being portrayed. When a consumer sees a video and they see features they’ve never seen before, they get blown away! They take out their credit card and they buy.

There are lots of advantages of consumers purchasing online versus in store (outweighing the disadvantages) such as transparency on price, analyzing reviews from verified buyers, feature comparisons, etc, but here we are focusing on the pitfalls.

These 3 brands started big. Once their brand took off, they took on the responsibility to deliver big. They didn’t start small, test the waters, and then slowly improve. They captured audiences at large scale and then figured out how to deliver. It’s easier to fix things when you mess up on 100 customers than messing up on 10,000 customers. Don’t misunderstand me, this could be an excellent launch plan, however it is a risky one.

For instance, these brands boasted features some have never seen before, such as integrated charging from your luggage, or location tracking, etc. What consumers didn’t think about, is how many weeks of clothing can I fit in this bag? Or how heavy will it be with all this extra fluff? Or what happens if the tech component breaks after 8 months, will the bag work? How good are the wheels? How sturdy is the telescoping handle? Has the bag been tested to carry 150 lbs of contents? How many miles can these wheels last on a treadmill? I’m sure you get the point… These are kinds of things that are almost impossible to get all correct the first time around. They take numerous rounds of revisions and thousands of actual customer feedback comments to reach excellence.

As the Founder of Genius Pack, I can’t say I would have acted any differently than the founders of these brands if the opportunity was present. I would have also tried my best to deliver in a large fashion… We had some product problems in the early days too, but they were on a smaller scale and we were able to roll up our sleeves and continue onward. For instance, our first production run was just 500 units, then 1600 units, and so on. Everything we know today about creating excellent luggage was from listening to every customer throughout the journey. Founders need to be realistic about their risk appetite. I feel a safer way to success for any startup is to begin small and slowly improve throughout the course.

*Traditional methods of advertising.