Three ways that travel retail is riding on digital
Travel retail has tended to be a niche market, but the digital world is opening up opportunities to be seized. Here are three ways that the duty-free sector is catching up with the digital challenge.
1. Make earlier contact with potential customers.
- Educate travellers about products and services available at the airport.
- Put airport shopping in front of them.
Example: a “buy now, collect later” service where customers can shop online at leisure before their trip, save time at the airport, and choose if they wish to pick up their purchases on departure or upon arrival.
2. Align the sales strategy with the entire airport ecosystem (airports, airlines, brands).
- Partner with airlines to inform travellers about what they can find in store at the same time as they get online confirmation for their flight.
- Highlight personalized and exclusive offers.
Example: a loyalty program that is tailored to frequent travellers and that offers benefits such as free parking, lounge access and fast-track privileges.
3. Change the value proposition.
The duty-free sector traditionally focused on pure value for money. Now, it is moving toward exclusivity and novelty, as well as delivering shopping experiences that meet and exceed customer expectations.
- Promote products exclusively on travel retail before they are available in other sales channels.
- Feature products and services that are exclusive to the travel experience, such as special packaging, tastings or brand interactions.
Example: virtual assistants that interact with travellers in different languages and interactive personal shoppers that suggest other items relevant to what the customer is looking at.
Travel retail is a promising market. Global duty-free sales in 2017 reached USD 68.6 billion. (1) But while other retailers have been quick to jump on the digital bandwagon and push their content commerce capabilities, travel retail has lagged behind. These companies do not necessarily have a website for each of their airport stores and the offerings for where they have website stores may be limited.
Yet there is a clear path forward. Leading global travel retailers can reach up to 2.5 billion potential customers each year, i.e. passengers transiting through the airports in which they operate. The number of potential customers, combined with the “dwell time” - the time passengers spend after security check and before boarding - opens a window for commerce opportunities.
Travel retailers are working to grab the attention of this captive audience and to focus on those micro-moments where immediate needs or spontaneous emotions can trigger certain buying decisions.