Is travel retail still relevant?
In recent years, there has been a distinct decline in travel retail. Duty-free is no longer alluring when domestic and international e-commerce options are so convenient and competitive.
Covid-19, understandably, caused a huge downward spike for the wider industry (about 70 per cent). And while revenues and traffic are recovering, the industry isn’t expected to return to pre-Covid levels until next year.
There’s a huge opportunity to be tapped. Experiences in travel retail are traditionally more interesting than in land-side channels.
Brands often have more power than retail in these environments and, as a result, can bring their A-game to their experiences.
Viewed through a retail lens, there are some interesting challenges and observations.
The retail travel contradiction
Firstly, travel retail suffers from the ultimate contradiction. On the one hand, shoppers often have dwell time at airports. As a result, there tends to be a lot more aimless browsing than focused shopping.
On the other hand, there is a limited window of time to get people to buy. If check-in and immigration are arduous, it bumps people out of shopping mode.
The full-frontal assault on the shopping senses is often overwhelming and has precisely the opposite of the intended effect. Picture hurrying shoppers with eyes down to avoid getting sucked in.
This so-called ‘golden hour’ for retailers is increasingly competitive, with more brands and more experiences jostling for shopper attention.
The importance of retail staff
With so much competition, retail fundamentals have to be spot on. Staff must be on point.
Travellers will be coming from an array of different countries and cultures, with diverse expectations. Staff have a huge role to play in converting the rump of shoppers who may be interested in products but unwilling to commit.
Converting the impulse shopper is the key role for staff in these environments. With basket sizes significant in travel retail, every lost shopper has an impact. Likewise, every upsell has a real impact.
Lean into the occasion
Travel retail needs to lean into the occasion. Be attuned to the shopper and their likely mission.
Often, retailers in this space are dealing in ‘memories’. Travel retail shopping is part of the holiday or leisure break. We need to tap into that sense of remembrance. Be hard-wired into the ‘holiday mood’ to stimulate pleasure and avoid, at all costs, the everyday.
This means innovating and rethinking stores as well as the sensory experience.
Shoppers are increasingly tech-savvy and retailers are missing a trick if they don’t leverage this within travel retail. Digital experiences and entertainment are crucial.
Perhaps even more crucial is pre-trip engagement. If we engage shoppers before they enter the Hawker’s market at the airport, we stand a much better chance of success. This could take the form of personalised email campaigns, targeted ads on social media, or app notifications highlighting exclusive airport offers.
Travel and retail go hand in hand
To win, retailers need to understand the shopper’s journey and create both entertainment and engagement. Relevance, differentiation and investment in staff are all required for success.
Further reading: How Lotte Duty Free is elevating travel retail with tech and premium brands
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