Travel retail has clearly been in decline in recent years. With convenient and competitive domestic and international e-commerce options, duty-free is no longer attractive. Unsurprisingly, COVID-19 caused a huge decline across the industry (around 70%). While revenue and footfall are recovering, the industry is not expected to return to pre-COVID levels until next year. A huge opportunity remains. The travel retail experience is traditional,
Retail travel is even more interesting than land-based channels. Brands often have more power than retailers in these environments, and as a result, they can deliver the best experience. Looking through the retail lens, there are some interesting challenges and observations. The contradictions of retail travel First, travel retail suffers from the ultimate contradiction. On the one hand, shoppers often stay put at the airport. As a result, they tend to spend more time aimlessly browsing than focused shopping. On the other hand, there is a limited amount of time to encourage people to buy. If check-in and immigration are a hassle, people are taken out of shopping mode. A frontal attack on the shopping senses is often overwhelming and has the exact opposite effect to the intended effect. Imagine rushing a shopper who has their eyes downcast to avoid being sucked in. This so-called “golden hour” for retailers is becoming increasingly competitive, with more brands and more experiences vying for shoppers’ attention. The Importance of Retail Staff With so much competition, retail fundamentals must be precise. Staff must be on point. Travelers come from different countries and cultures and have different expectations. Staff have a big role to play in converting the remaining shoppers who are interested but not ready to make a purchase. Converting impulse buyers is a key role for staff in this environment. Basket size matters in travel retail, so every lost shopper has an impact. Similarly, upselling has a big impact. Capitalize on the opportunity Travel retail needs to capitalize on the opportunity. Consider the shopper and their intent. Retailers in this sector often deal with “memories”. Shopping in travel retail is part of a holiday or leisure vacation. You need to capitalize on that sense of memory. Get into the “holiday mood” to spark joy and avoid the mundane at all costs. This means innovating and rethinking not just the store but the sensory experience too. Shoppers are increasingly tech-savvy and retailers who don’t leverage this in travel retail are missing out. Digital experiences and entertainment are key. Perhaps pre-trip engagement is even more important. If you can engage with shoppers before they enter the airport hawker market, you’re much more likely to be successful.This can take the form of personalised email campaigns, targeted advertising on social media and app notifications highlighting airport-exclusive offers. Travel and retail go hand in hand. To succeed, retailers need to understand shopper behaviour and create both entertainment and engagement. Relevance, differentiation and investment in staff are all vital to success. Further reading: Decathlon opens first airport retail pop-up at Changi Airport
