A three-word phrase is taking over the startup world: direct-to-consumer.
And two former Warby Parker executives have joined forces to launch Away, a luggage startup that sells -- you guessed it -- direct-to-consumer.
According to online database Statista, North America is expected to generate $8.64 billion in luggage retail sales this year. And Away co-founders Jen Rubio and Steph Korey are looking to take a bite out of the market — in the same way Warby Parker did with eyeglasses.
The company launched its site on Monday but doesn’t have any inventory for sale yet. They are selling gift cards for their only model -- the carry-on -- in time for the holidays, and buyers will receive their luggage starting in February.
When asked how many gift cards they have sold so far, co-founder and co-CEO Steph Korey replied, “We’re printing more gift cards; we’ll leave it at that.”
The allure of the carry-on
According to aviation communications company SITA, airlines in 2013 mishandled 21.8 million bags. Though that’s less than half the rate in 2008 -- when airlines mishandled 46.9 million bags -- frequent fliers may favor traveling light with a carry-on rather than deal with the woes of lost or late baggage.
More than 68 million Americans traveled abroad last year, a 10% increase from 2013, according to the Commerce Department. The major players in the global luggage market include Samsonite, Tumi, and VF Corporation. But whereas Samsonite carry-ons cost between $90 and $200, and Tumi’s range from $450 to $2,000, Away’s price point is $225.
Luxury...for less?
Korey acknowledged that Away’s products aren’t cheap. She told Yahoo Finance, “There are two polarizing options - either cheap luggage that will break somewhat quickly or expensive luggage that’s nice but it will run you $500 or $1,000. We’re building top quality luggage, beautifully designed. But by selling exclusively direct to consumer, we’re selling it for a fraction of that price.”
The Away carry-on has a polycarbonate hardshell, silent spinner wheels, and interior silk lining. But it’s major selling points? Virtually silent 360-degree spinner wheels, a removable laundry bag for your dirty clothes, and a built-in 10,000 mAh battery that charges your smartphone up to five times when you’re on the go.
“When I go somewhere for the weekend, I don’t even bring a charger because my suitcase charges my phone the whole time,” Korey said.
Beyond the battery component, Korey said there’s a lot of other technology that could potentially be integrated into luggage, but noted the sticking point was that “everyone complained that their cell phones die when they travel.”
When talking to potential customers, Korey found they didn’t care about how much the fully packed carry-on weighed or whether it has a built-in tracking device, because people tend to, well, carry on these suitcases.
Staying connected
Away has raised $2.5 million in seed funding co-led by Forerunner Ventures and Accel Partners.
As head of supply chain at Warby Parker -- currently valued at $1.2 billion -- for over two years, Korey was able to reap the benefits of the association.
“A lot of the investors we met with were actual investors in Warby. Investors were happy that Jen and I had an inside role in building Warby in those early critical years.”
Not only professionally, but personally as entrepreneurs, Korey says Warby Parker co-CEOs Dave Gilboa and Neil Blumenthal “have been incredibly supportive throughout this entire process” and “gave [them] a lot of really great advice early on and how to launch.”
Up, up and away
In a few months after the carry-on begins shipping, Away will launch the “perfect checked bag” in two sizes -- medium and large.
Though the company doesn’t have any permanent retail spaces right now, it plans to open up a pop-up shop in LA this spring.