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BW Businessworld

‘Luggage Is Not Just A Box On Wheels’

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This is Delsey’s second innings in India. The French luggage company’s initial foray here was through a brand licensing partnership with VIP Industries, which it discontinued after 10 years. In 2011, it returned through a 51:49 joint venture with Beauty Concepts, a distributor of global fragrances.  With India seemingly in the bag of its rival Samsonite, and VIP also a competitor, what strategies has Delsey packed in its suitcase for the market? Excerpts from a conversation with Guenther Trieb, Group CEO, Delsey.

How important is India for Delsey?
India is one of our key priorities.  China is close behind in terms of growth. If you can win big in Asia, then you can win big in the whole industry.

How are you competing against Samsonsite which is already well entrenched in the Indian market?
It is a behemoth. But we are creating a niche for ourselves through product differentiation.
 
What are the differentiators? What is your positioning in the market?
We are aiming for consumers who do not buy luggage as a commodity product. We believe people who buy Delsey are charismatic people who stand out in a crowd.  We are positioned between premium and affordable luxury. Our pricing is in the mid to upper end. We just cannot be mass market. Delsey’s a brand that crosses barriers and even gets luxury customers. You could be holding a Louis Vuitton handbag and pulling a Delsey.

Like Samsonite has created different brands to cater to different categories (mass, premium, etc.), has Delsey considered a second brand?
No, we are focused on Delsey as a single brand.

What is your retail model in India?

We are in 200 doors (including 30 exclusive brand outlets, dealers, department stores) in all metros. We won’t be in a Big Bazaar, but we’ll be in a Lifestyle or a Shoppers Stop. Our aim is to get to 500 doors by 2016.

Do you adapt to local markets? Is your luggage customised for India, for instance?

Customised is not the word. We have a global design range, and countries pick out what suits them best. Luggage is dictated by airline regulations and these change from region to region. When we design, we look at the consumer profile: the young busy mother, the retired person, the busy executive. We think about all these situations and characters and design accordingly.

So, for a retired person, how would the product be designed?
We would design very good wheels that are easy to pull. We look at the way they live and travel, and then design for them. The young mother’s luggage would have many pouches.

New product cycle times are coming down. How often do you refresh a product line?

In high-tech industries such as mobile phones, one year means seven regular years. But in luggage, we are still going at normal speed. Of course, we do bring innovation every year. We are replacing and upgrading our key product lines every 2-3 years. A certain percentage of our products will be changed every year. This gives consumers something to talk about. But the danger in changing too often is that you are not doing your consumer or your trade partner any favours.

But given that gadget sizes and laptop sizes are evolving so rapidly, doesn’t your luggage have to keep evolving?
Yes, in business cases, we do see the effect of this evolution. As laptops get smaller, we see business cases going smaller and smaller and smaller. Luggage technology too is seeing evolution — the material is much lighter, much more silent.

What about fashion dictates?
Average replacement of luggage by a consumer is only once in five years. But yes, we do bring in seasonal products, special editions. Cool colours in spring, for instance.

Is black going out of favour as it does not stand out on airline conveyor belts?
Black, blue and brown are basic colours and the biggest part of our turnover. But yes, the days of the boring black box are slowly getting over. We find that women are driving the change.
 
Delsey started life as a camera case company? Do you still make them?

We still have a small range of camera bags, but that is not our focus today. Luggage is our focus. Today, luggage is not just a box on wheels for travel. It is for day to day use. This is where the market for luggage is growing — diversifying into bags, backpacks, wallets, accessories.  The largest percentage of our turnover is still travel luggage. It is more than half. But duffel bags, and business bags, are the fastest growing (market). In school bags, we are very strong in Belgium and France.

Will you introduce schoolbags in India?

Hopefully, soon.

You have worked over two decades in P&G. What are the learnings from the FMCG space that you have brought to Delsey?
To understand the consumer. What I have taken from P&G is that I am not boss, the consumer is the boss. The consumer is the centre of all attention. Treat the consumer like you would treat your wife. I and my organisation are very focused on the consumer’s moment of truth. The first moment of truth is when the consumer gets into a shop — does he or she choose Delsey or not? If not, then game over. The second moment of truth is when the consumer travels with a Delsey product — are you proud of it or is it something you don’t like? If not, then you lost a great opportunity to have a loyal customer by your side.

So, key learnings: being aware that the consumer is boss, being aware of the moment of truth, making sure that you have the right consumer insights to drive relevant innovation. I guess this is what I have tried to bring to Delsey from one of the world’s leading FMCG companies. 

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(This story was published in BW | Businessworld Issue Dated 27-01-2014)