Back to Basics: Travel Retail’s bricks and mortar
The world of digital and the travel retail industry have a lot in common: both have a unique commercial landscape, their own geographies and an ability to essentially operate whenever the shopper needs them to do so.
October 2015 | by Kathryn Maude, Category Director
Travel retail is embracing the digital phenomenon by incorporating it into the in-store offering and using it to expand the shopper journey – including via applications, social media engagement, e-commerce and brand collaborations.
Whilst this is the correct thing to do, our experience and research indicates that it can be at the expense of the traditional ‘bricks and mortar’ travel retail experience.
Shoppers know and love the showcase of retailing opulence, the wonderful displays of the world’s most prestigious brands and the in-store theatre associated with the travel retail industry. For this to continue and evolve, it’s vital that the necessary foundations are laid correctly so that stores operate efficiently and shoppers’ basic needs are met.
Here at CiR, we refer to this as ‘ease of shop’; that is, ensuring products are easy to find, easy to choose and easy to buy. The right assortment in the right spaces, displayed correctly, communicated appropriately and complemented with exceptional customer service sets the scene for the overall shopper experience within travel retail.
Less is more when it comes to product assortment. It might seem logical to add more products to increase shopper choice, but it actually has the opposite effect – duplicated and similar products cause confusion.
In most categories, 80% of sales should come from between 40%-50% of the range; currently, most categories are returning 80% of sales from just 20% of SKUs.
It’s good practice to monitor, evolve and condense the range based on sales data as and when appropriate.
Although a good guideline, a pure space to sales ratio needs further consideration – particularly as each category has its own nuances.
If we take the liquor category as an example, in shop x liquor accounts for 15% of total sales so is allocated 15% of the overall space in-store. Within this category, there are a number of high value and high sales subcategories, such as premium scotch, which contribute a large percentage of sales. If we follow the space to sales ratio through, a pure space allocation based on this means the subcategory will be over spaced –taking valuable shelf metres from other categories and brands.
In this respect, it’s important to consider the assortment itself and the value of the products within space allocations.
We divide the term ‘display’ into two elements: 1] the position of the category and 2] the presentation of the product. Both require the necessary research – nationality preferences, basket analyses, and so forth – but need to be approached slightly differently.
The position of the category will depend on its role in-store: is it a drive category, a destination category or an impulse category? Once the key categories are established, it can be anchored and adjacent and complementary categories can be mapped around it.
Brand beacons are vital for a good product display, as they act as the main visual attraction for the shopper. On the fixture itself, a logical segmentation and flow of brands is essential to help shoppers locate their product and make their choice.
Communication is key, but is required in quality rather than quantity.
Navigation is the primary communication need in-store, as shoppers want to be able to find their product quickly and efficiently. Once they have located their product or brand, the next tier of communication is in the price and the promotion (which we’ll cover in more detail in the weeks ahead). The signage must be clear, easy to understand and instantly engaging.
Remember that in-store communication is ultimately about connecting with the customer and relaying the retail and brand story. Keep it simple and relevant.
This is the one area where digital can’t compete with travel retail’s bricks and mortar offer: exceptional customer service.
Be it a welcome greeting as the shopper enters the store, in-depth store, product and airport knowledge, or helpful guidance and advice, customer service is a key competitive differentiator and a long-term commitment for every travel retail store.
The service a customer receives is also associated with the retailer’s brand values – and there is a lot of research to suggest a strong link between excellent customer service and increased profitability.
Travel retail is right to utilise digital to enhance the shopper experience; the digital industry is then more of a tool rather than a competitor.
Whilst customers are more tech-savvy than ever and are comfortable enough to engage with the retailer in a variety of different ways, there needs to be a targeted strategy in place to tie all these channels together. This must begin with the basic ease of shop principles in the store.
‘Traditional’ travel retail has a bright future ahead. The retail fundamentals highlight that the industry has so much more to offer – provided that it continues to focus on what really matters: the customer.
Source: CiR database
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