How Australian luggage brand July grew its U.S. sales by 400% in three years
Like many emerging foreign brands, Australian luggage brand July expanded its business to the U.S. in 2021 aiming to take a slice of one of the largest consumer markets.
In just three years, the company managed to grow its U.S. sales by over 400%. In its first year, the U.S. accounted for 10% to 20% of its revenue, but that figure has now grown to 30% to 35%. July credited its targeted approach to paid advertising as the main driver of growth.
The U.S. has been a target market for many overseas brands due to its size and the spending power of American shoppers. But it can be tricky given the composition and diversity of every U.S. state. While the U.S. is already generating a significant amount of revenue for July’s business, the Melbourne-based brand believes that the market has the potential to produce 50% to 70% of its total sales.
“It’s every Australian business’s dream to grow into the U.S. market,” said Athan Didaskalou, co-founder of July. “It’s definitely where the big guys go and play and so we know that’s always the natural progression.”
July, which was named after the month when many people schedule vacations, was founded in 2019. The company operates purely as a direct-to-consumer business in the U.S., but it has nine retail stores in major cities in Australia. The company is also available in countries like New Zealand, the U.K. and Singapore.
Richard Li, co-founder of July, said the company was able to grow into a profitable business within six months of being in the U.S. and has been profitable since then. July’s total business has been growing at a rate of over 50% year-over-year. Including colors and limited edition products, the company offers over 400 SKUs.
“A lot of people [in the U.S.] have never heard about us, which is amazing because we thought that we were doing well,” Li said. “That really excites us because it means that there’s so much potential in the market.”
July’s messaging in each market also varies. For instance, Americans respond well when July leans into its Australian roots, with taglines like “G’day U.S.A.” However, the U.K. is not as receptive to this type of messaging, Didaskalou said.
Like many DTC businesses, July invests its marketing dollars into digital channels like Facebook, Instagram and Google. However, the company chooses to highlight specific product features it believes would get people’s attention. For example, its wide array of colors and luggage handles that can be adjusted at any height are effective features that get people to buy July’s products.
The founders said that the company is also aware that residents of each U.S. state have different shopping habits. July tailors its messaging to appeal to people living in specific regions. For example, the company said luggage features like bigger wheels matter for people living in states that have heavy snow. Additionally, the company said that in states like New York, more people tend to buy luggage around July 4th so it tends to push ads earlier for people in that area. However, in California, July said not as many people buy luggage during that time of the year.
“You can’t expect something to work well in one region and work in the other as well,” Didaskalou said. “I would say messaging that even works in California doesn’t work in Texas. You can’t just blanket the U.S. as one message to dominate all.”
Dan McCarthy, assistant professor at Emory University’s Business School, said that it can be difficult to replicate overseas success in the U.S. He said the supply chain and distribution network in the U.S. can be complicated and expensive. Finding reliable trade partners is paramount to ensuring that their products will not go out of stock.
“It increases the complexity of the business to operate in multiple different geographies,” he said. “There are some notable downsides to operating both in Australia and in America. But I think that the revenue and brand opportunities would certainly significantly offset that.”
July isn’t solely focused on the U.S. On its home turf, it will be supplying all Australian athletes with luggage for the Olympics. The founders said that they see some marketing opportunities to emerge from this initiative.
The company also doesn’t plan to stay an online-only business in the U.S., Li said. July intends to open its own store in the U.S. in the future. For now, it plans on opening a pop-up store in Los Angeles “in the next couple of months.” In the fall of last year, it also opened a pop-up store in New York’s Soho neighborhood.