Press & Awards
There’s a big turnaround happening at eBags
October 06, 2016
In the year since eBags has operated under a new CEO, the retailer’s online sales growth has topped 20% for three straight quarters.
Things are looking up at eBags Inc. The web-only retailer has experienced three straight quarters of sales growth above 20% following several years of what the merchant calls “anemic” growth in the single digits.
The online-only retailer, No. 169 in the Internet Retailer 2016 Top 500 Guide, doesn’t publicly disclose its revenue, but Internet Retailer estimates it did about $194.8 million in sales last year and has been growing at roughly 9% on average for the past five years.
Much of the turnaround is due to an aggressive, multipronged growth strategy put into place in mid-2015 by eBags’ new CEO, Mike Edwards, according to eBags chief operating officer Daniel Hogan and director of merchant planning and strategy Jonathan Fox.
First came a kind of reinvention of the company and a repositioning in the market. It now considers itself a travel company instead of a luggage company. This has allowed eBags to branch into new product categories and work with such brands as Bose, which sells high-end earphones and electronics for on-the-go consumers, and Nest, which supplies home security-type systems for consumers to monitor their homes while they’re traveling.
"When Mike got here, we were really asking ourselves, 'Are we a fashion company?'" Hogan says. "'Are we about handbags or luggage?' Once we decided to own the travel space, it gave us a lot of license to expand the assortment on travel and dig into what categories of products people travel with. That's what led us to Bose, which is headphones, and Nest, which is away-from-home security."
The eBags rollout of Bose products during the third quarter of this year was the most successful launch of a new brand in the company's history, eBags says, as sales in the first week broke company records for a new product introduction. The retailer has been in business since 1999.
As the busy holiday season approaches, eBags has 88,000 SKUs for sale, up 43% from last year. It’s also selling products from 877 brands, a 51% year-over-year increase. The majority of purchases on eBags.com are drop-shipped to consumers directly from the suppliers, though eBags does warehouse some inventory from top-selling brands like The North Face, Jansport and Samsonite.
eBags also has rolled out a new product this year, its Connected Luggage tag, which allows consumers to track the location of their luggage from their smartphones should their bag ever be lost. The tags have a QR code on them, so whoever finds the bag will see on the tag, “Found Me?” and be able to scan the code with their own smartphone. The purchaser of the tag can choose how much information to reveal, such as a phone number or just an email address.
The product is one of the top items searched for on eBags.com, Fox says, and it's also the highest-converting product on the site.
Mobile has been another major push for eBags in the past year. The merchant now has a mobile app and enhanced mobile site with a streamlined shopping cart that allows shoppers to check out much quicker. "Going forward, we'll be mobile first," Hogan says. "There's where all the volume is moving."
Hogan and Fox acknowledge that sales from mobile devices still represent a small portion of total sales, but they’re growing fast. Mobile visits were up 40% year over year during the third quarter, eBags says, and mobile sales jumped 84%.
Also this year, sales to consumers outside the U.S. are helping to grow the business. EBags signed on with international shipping and logistics company Borderfree, so the merchant is now able to ship to more than 180 countries, with Borderfree handling fulfillment. Borderfree will also allow eBags to sell its products directly to Chinese consumers via an eBags storefront on Alibaba Group Holding Ltd.’s online marketplace Tmall Global, set to open in the fourth quarter.
Fox says eBags is only the second e-retailer to sign on to Borderfree’s Tmall program. EBags says it plans to be up and running on Tmall before Alibaba’s Singles’ Day online shopping event held Nov. 11. This is the world’s largest online shopping day of the year, projected to drive roughly $20 billion in sales in a 24-hour period.
Borderfree was acquired by Pitney Bowes in June 2015.
Also leading into the holiday season, eBags is pushing to expand its sales on the Amazon.com Inc. marketplace, Fox says. EBags was one of the earliest sellers on Amazon, launching there in the early 2000s. The merchant has steadily increased the number of products it sells on Amazon (No. 1 in the Top 500), but in the past year eBags has dramatically expanded its assortment there, and increased the volume of inventory it’s stocking through Fulfillment by Amazon.
Most of the items eBags is selling on Amazon are items no one else offers, such as its private-label travel products or exclusive items made for eBags by brands like Swiss Gear, Fox says. These products do particularly well on Amazon because eBags can set its own price and not compete with other marketplace sellers on the same product.
Gearing up for the holidays, eBags has tried to strategically locate its inventory throughout Amazon’s fulfillment network so its products are closest to consumers most likely to purchase them. Now that eBags’ inventory is fully stocked in Amazon warehouses, this will give the merchant more access to big sales events on Amazon during the holidays, like Lightning Deals.
In order for a product to qualify for Lightning Deals, Amazon requires that merchants meet certain requirements, including having those items be Prime eligible and stocked in Amazon’s warehouses for shipment via Fulfillment by Amazon. They also must have high product star ratings and multiple variations (such as size and color) of the products in stock.