There’s serious baggage being shed in the luggage industry.

Earlier this week, luxury conglomerate LVMH (MC.PA) took an 80% stake in German high-tech luggage maker Rimowa for 640 million euros (or approximately $716 million).

In August, Hong Kong-listed Samsonite (1910.HK) acquired American Tumi Holdings for $1.82 billion. New Jersey-based Tumi is now part of Samsonite’s behemoth of a portfolio, which includes Hartmann and Lipault, High Sierra and Rolling Luggage.

Within the luggage category, Samsonite is the industry leader by far, with 17.3% market share worldwide. LVMH comes at a distant second with 5% market share and Rimowa has 1.8% market share.

This consolidation comes as the incumbent players attempt to gobble up competition. It also, however, reflects something deeper about the urgent need for these legacy brands to convince customers they need to buy new suitcases. At the same time, upstarts are gaining significant traction by doubling down on a direct-to-consumer strategy.

According to the latest data from Euromonitor International, the industry’s growth prospects are looking quite bleak; the retail value of the global luxury luggage market is expected to grow less than 2% in 2016 (its slowest pace in the last five years). Leaders like Samsonite and LVMH sense the industry is ripe with the need to innovate.

“Coming up with novel ways to sell luggage is therefore now critical,” says Fflur Roberts, head of luxury goods at Euromonitor.

The rise of hard-case luggage, in particular, is attributed to the growing popularity of premium brands like Samsonite, Tumi and Rimowa, which all recorded 10%-20% global sales growth in 2015, says Adeline Ho, an associate at Euromonitor.

“Its advantages in durability, resilience against abuse, and sleek aesthetics have finally begun to shine through,” she says.

The digital shift

Beyond durability, travelers now have high-tech expectations for their travel companions. Functionalities like fingerprint locking, built-in global tracking, bluetooth speakers, self-weighing scales, and Wi-Fi hotspots are an important growth segment, according to Roberts.

“Luggage makers have been looking to cash in on global growth in smartphone and app usage. This acquisition will help Rimowa expand these offerings further as well as developing even more sophisticated digital technology,” he says.

That’s why upstarts like Paris-based Delsey have been developing a smart travel bag, Pluggage. Showcased at the CES innovation awards last year, the bag is gaining significant buzz with frequent fliers. The bag includes fingerprint recognition and the same tracking technology used by Samsonite.

And, with the accompanying Pluggage app, you can stay updated on any flight changes, when the bag has been loaded ,or if it’s bag been opened. Though the price-point is undetermined, there’s no doubt that items like the Pluggage’s technology will likely boost the retail price for consumers.

The new wave of luggage

There are numerous startups in the space that are trying to provide solutions to common problems that weary travelers would like to resolve.

Take, for example, Away, a startup founded by two former Warby Parker executives a year ago. Branded as “first class luggage at a coach price,” the suitcase come in three sizes and prices range from $225 to $295. With a hardshell polycarbonate exterior, custom 360° spinner wheels, a removable 10,000 mAh battery and two USB ports, the company is putting a techie spin on a classic design.

Steph Korey, co-founder of Away, says there’s one central takeaway from this consolidation of the mega players in the industry: People are traveling more than ever.

“Consumers are focused on experiences like traveling and seeing the world so much more so than acquiring material possessions. Luggage is really the one product category that is an important part of that shift,” she tells Yahoo Finance.

With Rimowa and Tumi’s price points ranging upwards of $500, Korey says she’s targeting the younger jetsetter who is looking for more of an affordable option.

“Rimowa is a luxury brand and Tumi has been around for a while. Most of the big brands out there have a lot of history that maybe haven’t been as focused on the digital age,” Korey said. “We’re interested in figuring out what’s important to a modern consumer. We’re happy to be a part of an industry that’s going through this kind of exciting change.”

Eventually, Korey says, she wants to be the one destination to go for all of your travel essentials. With a pop-up store in NYC this summer and one opening in London, there’s clearly appetite for this new kind of suitcase. Korey and her team have raised $11 million in funding to date and the company is on track for $10 million in sales this year.

When it comes to novelty and practicality, tech-equipped baggage seems to be the crucial differentiator and what consumers are looking for.

“Smart luggage seems to make plenty of strategic sense, not least because it will improve as manufacturers get better at understanding what consumers want,” says Roberts.

By making luggage both smart and affordable, the smaller, direct-to-consumer players may be the real winners amid this industry consolidation.

Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.

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