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Is Technology the Next Big Battleground in Luggage?

November 6th, 2015

Innovation is a buzzword in the luggage industry at the moment, and some might say it’s about time. After all, the wheeled suitcase, invented in the 1970s, was the last time anything major happened to shake things up.

It’s true that, in the interim, manufacturers have come up with new ergonomic grips and handles, new materials (notably hard shells) as well as sleeker and more space-saving designs. We’ve even had carry-on bags that double up as scooters. But there has been little to galvanise the attention of consumers.

That might be about to change.

The industry gets “smart”

So-called smart luggage (carry-on bags and suitcases with built-in technology) is set to become a much bigger feature of the market over the next five years.

Bags with fingerprint locking, built-in global-tracking devices, Bluetooth speakers, self-weighing scales, SIM cards and Wi-Fi hotspots could soon become the norm. There are even suitcases in the pipeline that will be able to check themselves in at airports and follow you around remotely, without the need to pull them.

It all might sound rather futuristic for something we mostly use to pack our clothes in, but leading manufacturers believe that innovation in technology is where the money is. Crucially, they are keen to cash in on the huge global growth in smartphone and app usage, and consumers’ burgeoning expectations of “connectivity”.

Tech firms and luggage makers team up

Just as big-name fashion brands have been busy courting the technology giants to help them create the next big thing in wearables, so luggage makers are now at it too. Samsonite, most notably, has got together with technology giant Samsung.

Their new line of smart luggage, expected to be launched by early next year, will include features such as built-in GPS locators so that travellers know exactly where their bag is at any one time, using a paired app on their smartphone.

This, it is hoped, will alleviate the stress of waiting at the carousel for a bag that might have been lost. The luggage will also be able to send alerts to a smartphone when it is taken off a plane, or if it is opened without authorisation.

Is there a risk, though, that this type of functionality might prove a bit too niche? How many among us genuinely get worried about the precise whereabouts of our luggage, after all? And what about the safety implications of digital devices stored in the undercarriage of airplanes?

The manufacturers say these new gizmos will know exactly when to turn on and off – but in a world of increasingly paranoid travel, in which security is such a big deal, it is easy to imagine bags with built-in technology triggering all sorts of problems at security check points.

The best is yet to come

Ultimately, the “wow factor” features of smart luggage are still probably a year or two from coming to market. Samsonite and Samsung, for example, are working on developing bags that can check themselves in at the airport. The technology will work through a built-in chip that remotely tags a bag with its flight number. Such devices will need the collaboration of airlines, of course. Hence, big-name carriers, including Air France, KLM and Lufthansa, are working alongside Samsonite to help things along.

Samsonite and Samsung are also looking into the possibility of self-driving bags that will be able to steer themselves around using a built-in micro-motor and a remote control. These bags are aimed at alleviating the burden of mobility with luggage.

The next generation of smart luggage is unlikely to come cheap, however. And that could restrict demand. Equally, Samsonite will be conscious that middle-class consumers have a penchant for the latest in technology, and many are prepared to pay top dollar to own it. If in doubt, look no further than the huge sales of Apple iPhones and iPads. There is an argument, indeed, that the allure of technology has brought luxury spending to the masses.

Start-ups are set to shake up the market too

It is not only big-name luggage brands like Samsonite eyeing up technology. There are also a growing number of start-ups coming into the market. This is indicative of the fast-moving world of technology, where there tends to be room for smaller players to rise through the ranks if they have something new to offer.

San Francisco-based Bluesmart, for example, is grabbing plenty of interest. It is about to launch a carry-on travel bag that has all manner of gizmos housed in its handle, including battery chargers for a smartphone, GPS location tracking and a dashboard with geeky stats such as how far the bag has travelled. Once paired with a smartphone, the bag will automatically lock when you step away from it. It will be priced at around US$320. More and more of these types of bags are expected to hit the market over the next couple of years.

Emerging market headwinds

Over recent years, the luggage industry has reaped the benefits of a huge increase in outbound travel from the emerging markets, especially China. However, with the Chinese currency weakening, so the high growth rates of recent years are now coming under downward pressure. Similar currency headwinds are affecting demand in Brazil and Russia too.

According to the latest data from Euromonitor International, the retail value of the global luggage market is forecast to grow less than 7% this year, at fixed US dollar values, which would be its slowest growth since the 2008-2009 financial crisis (when sales contracted). Coming up with novel ways to sell luggage is therefore now critical.

Smart luggage seems to make plenty of strategic sense, not least because it will improve as manufacturers get better at understanding what consumers want. Also, as the technology develops, so costs ought to come down. And, in the longer term, making prices more accessible will be key.

The biggest risk is if consumers shun the first editions of smart luggage. A negative response could derail development, so manufacturers need to be wary of rushing out products before they are ready. Smart luggage is a long-term opportunity, and brands need to be patient in finding the sweet spot.

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Rob Walker

Rob Walker is a contributing analyst at Euromonitor International, writing comment and briefings across multiple industries. He has expert knowledge of Latin America where he worked for seven years, traveling extensively. His professional interests include the emerging middle class, global brand battlegrounds and corporate strategies when the going gets tough.

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