Showrooming and Sustainability in Travel Retail
As Dufry’s CEO, Julián Díaz, stated at the Trinity Forum 2015, the online retail business is the most notable threat to travel retail.
November 2015 | by Alison Hughes, Research Director
E-commerce holds many advantages: it can be cheaper, more convenient, plus it can be a very time-efficient way to shop if you know exactly what you’re looking for.
The increasing popularity of online shopping has led to a considerable amount of ‘showrooming’; that is, when shoppers visit physical retail stores to interact with the product before returning home to buy their chosen item online.
Traditional gadget stores, bookshops and fashion houses continue to lose out to online retailers that do not have the overheads or the rigid opening hours. With global e-commerce set to grow by 25% this year alone*, the attraction of online shopping is unlikely to slow down.
What does this mean for travel retail?
Inevitably, online shopping and showrooming have and will influence the existing concept of travel retail as we know it.
After all, this form of advanced window shopping already happens right the way along the passenger journey – be it researching flights and hotels online, reviewing restaurant recommendations, or reading expert blogs for inspiration.
It’s therefore a natural progression for the traveller to shop in this way when in store. An estimated 43% of consumers use online services to make instant price comparisons when in duty free stores** and 75% of social media users are influenced by product recommendations they’ve read online***.
The main issue with this is that showrooming widens the marketplace and increases competition; the once captive travel retail audience now has other online options and possibilities to explore alongside the in-store experience. If a travel retailer cannot compete with online stores purely on price, it needs to add value in other ways to make a purchase at that moment in time the most appealing option to the shopper.
Through reverse showrooming, or ‘webrooming’ – researching products online and then buying in the physical store – travel retail can continue to offer a unique ‘real-world’ experience. From the time they enter the store until they arrive at the check out, there is an opportunity to grab the showroomer’s attention with exclusive products, theatrical promotions or retailtainment, special deals and exceptional levels of service.
As mentioned in a previous comment, our research suggests that there is a strong link between excellent customer service and increased profitability. The continual, ‘faceless’ online competition means that face-to-face customer service has never been more important to the industry; insightful, knowledgeable and personable brand ambassadors and employees are able to build a rapport with shoppers, in their own language, and show them that the store cares.
Online retailing and showrooming forces the traditional travel retail store to up its game and find new ways to entice the shopper, which is an opportunity to advance as an industry. Including online shopping benefits within the conventional store environment – such as click and collect, home delivery and real-time offers– results in an e-commerce storefront and after sales service, but also allows the retailer to focus on the shopper in-store and create a seamless travel retail experience.
What’s interesting is that the digital and physical channels are increasingly complementing each other, rather than competing.
For instance, Amazon recently launched a physical bookshop that stocks the most popular books as voted by its customers****. Next to each product is an eye-catching, comprehensive customer review and underneath that is a subtler book title; a concept that in itself turns the traditional communication hierarchy on its head. Overall, the store seemingly blends online and offline retailing and is proving a success.
It’s likely we will see even more omni-channel approaches in travel retail, as consumers embrace new technological advances to enhance and aid their shopping experience.
Shoppers, as travel retailers, will no longer think of shopping as being online or in a store, but as a highly-informative, location-based, collaborative, emotive, fulfilling and personalised experience.
If unspecified: CiR database