Two For The Road : Samsonite And eBags

In 1998, Jon Nordmark suggested to his bosses at Samsonite that they start selling online. The CEO replied that nobody would ever buy a bag by email.

Boy, was he ever wrong. Nordmark quit, taking several colleagues with him. And that same year, backed with $30 million from Benchmark Capital, they founded eBags, a pure-play ecommerce firm specializing in bags.

There have been many changes since then. But last week, having achieved sales of $158.5 million in 2016, eBags agreed to be acquired for $105 million. And guess who’s buying it? Samsonite.

This news was lovingly reported on Friday by The Denver Post, as well it should be: Ebags is a Denver-area firm, and Samsonite was started there in 1910. What the Post didn’t say is that email had to be a big part of this transaction.

Consider the evidence. Chain Store Age reported last year that eBags was deploying the Criteo Dynamic Email solution so it could pair “anonymous behavioral data with third-party, permission-based email addresses from Criteo’s publisher network.”



Why do that?

“'For eBags, email is one of the strongest communication channels with our customers, and the place where we see the most interaction on a day-to-day basis,' said Larry Sweeney, search marketing manager at eBags," Chain Store Age continued. “'We activated Criteo Dynamic Email to complement our in-house promotional emails and extend reach to new audiences outside of our existing customer base.'"

This move helped the firm achieve a 30% increase in its open rate, and a 25% hike in its click-through rate. “By refining its email marketing activities with personalized data such as previous browsing history, eBags is making sure it effectively reaches out to shoppers on all available platforms,” Chain Store Age concluded.

This wasn’t some late corporate conversion to email. In the year 2000, two years after its founding, eBags won the Best Email Marketer Award. And it has clearly stayed abreast of email bestl practices.

“Luggage company eBags sends a highly successful win-back campaign to lapsed customers,” Loyalty 360 has reported. “It offers $10 off a future purchase with a personalized subject line and preheader text. The discount code is unique to each subscriber. For eBags, the email is not just about driving another purchase; it stresses creating a favorites list (fodder for future content) so eBags can find the perfect bag for that subscriber."

Here's the real value in this sale, though: The eBags database contains data on 250,000 customers and 1 million My eBags loyalty program members, according to Chain Store Age. As eBags sells only online, we assume that it has email addresses on all those consumers. And that is no small advantage in today’s market.  

"A company's customer database -- email addresses, demographics, past purchasing behavior, and preferences, as well as its brand, are immensely valuable assets to an acquiring company," said Allen Pogorzelski vice president of marketing for Openprise, commenting in general on transactions of this sort in an email.

Granted, there may be more to this than email. Last year, eBags also announced that would “unveil a system of tags and a mobile phone app that turns bags into 'smart' luggage able to keep an inventory of what’s inside and help locate the bag itself,” Denver Business Journal reported. Then there’s its active mobile marketing.

Samsonite has a winner on its hands. And it seems to know it. “The acquisition provides us with a strong platform to significantly expand our direct-to-consumer online presence, not just in North America but around the world, said Samsonite CEO Ramesh Tainwala in a statement. “With eBags’ immediate resources and digital expertise, we are able to expand our online retail capabilities in a meaningful way, driving stronger sales growth across all the brands in Samsonite’s portfolio.”

That says it all.

Next story loading loading..