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(formerly Counter Intelligence Retail)

We specialize in global traveler statistics, data driven insight, and activating against trends for all major categories sold in duty free and travel retail.

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CIR

The Industry In 2018; Part Two

Last week CiR shared their views on the industry trends Travel Retail and Duty Free is likely to see and experience in 2018. Here we investigate the trends likely to influence traveller and shopper behaviour, including localisation, sustainability, experiences and personalisation.

January 2018 | by Garry Stasiulevicuis, President

1. More remote locations and local products to match

DF&TR is centred around the large hub airports. But spare a thought for smaller regional gateways – especially those in Europe. Travellers looking for more authenticity are increasingly using the main hubs to connect to more far-flung destinations, for example Lapland in Finland, or historic centres that are not big cities, like York in England, or Heidelberg in Germany. 

More seasoned Asian travellers, in particular, are looking for creative holidays – even if they require extra journey legs – and this potentially opens up regional airports to greater retail opportunities for genuine local and regional products.

Low-cost carriers remain the driver of traffic growth and they have unlocked some previously unexplored destinations to inquisitive travellers. This will continue as the idea of being a traveller, not a tourist, is on the rise. So slapping a cityscape or country name on the packaging of a generic product for ‘souvenir’ appeal is not going to wash with this type of passenger. They will seek out genuine products from local producers where they can.

2. Sustainability issues in travel and spending

Buzzwords come and go, but sustainability is here to stay. Despite US plans to withdraw from the Paris climate accord and President Trump tweeting “perhaps we could use a little bit of that good old Global Warming” (a reference to plummeting temperatures in the east US before New Year’s Eve), sustainability – from travel to product sourcing – is a growing concern for consumers.

Fuel efficiency and lower emissions have become a mantra at airlines, cruise lines and other transport providers, while travellers have more options to stay at eco-lodges, or eat locally in a more sustainable way. DF&TR operators will no doubt be aware of shopper enquiries about the sourcing and manufacture of their products – and making their choices depending on the answers. Heinemann recently teamed up with bag manufacturer Loqi to offer an eco-friendly alternative to plastic bags, which can carry a weight of 20kg, ideal for duty free liquor purchases, and for reuse afterwards.

Sourcing products that are also gentler on the environment such as wines from vineyards that use animals to fertilise the ground, wild salmon versus farmed salmon, or stocking local gourmet foods to limit their ‘food miles’ will increase as demand for sustainable products grows through better awareness.

3. ‘Experiences not things’ – a continuing mantra

Part of the idea of being a traveller and not a tourist is doing things that don’t involve simple sightseeing and shopping. That does not mean DF&TR operators will miss out, they just need to be more adaptable in what they offer.

Experiential travel – swimming with dolphins or walking on Antarctic ice – may seem an expensive option for the select few – but experiences come in all shapes and forms. Taking a paella cooking class in Valencia or staying in the home of a local in Pisa for example.

Such ‘cultural immersion’ – as well as extreme adventures – is on the rise as travellers use their trips to achieve goals, or find their ‘inner selves’. Many travel companies note the increase in trekking and hiking holidays for example and it all points to a search for validity – a hunt for the genuine article.

This has spilled over into retail where products that ‘mean something’ in the context of a location have become increasingly important. International brands that don’t have any local connection don’t have to miss out. In terms of offering experiences, they can create them in-store through promotions and animations that drive appeal for their lines.  

4. Personalised products on the rise   

We have all experienced clever marketing where online retailers remind you of the merchandise you have just browsed, or let you know that other shoppers also bought X, Y and Z items to go with the product you are about to order.

This personalised marketing is simple to achieve in the online world, less so in physical stores without some prior profiling of the consumer. Sales staff can of course make suggestions but a better option, when no prior data is available – is to provide highly-differentiated products or services.

Personalisation is becoming an expectation for shoppers today so customised engraved or etched perfume bottles, stitched initials on apparel and other items, have become widespread. As well as the entertainment value of watching computer-programmed robots performing such tasks, the concept works especially well in DF&TR environments where passengers are often looking for presents. And personalised presents are hard to beat.

Beauty houses know the benefits of diagnostic digital tools that provide a customised skin or make-up assessment in minutes. But expect to see the appearance of online in-store chatbots that can take consumers through a similar process in exchange for giving up some personal information and data. Expert advice, be it from an actual sales advisor or chatbot, will ensure the bespoke experience passengers are looking for. 

In conclusion;

The industry is in a promising position, with a return to positive sales growth being recorded in 2017. However the opportunities are there to be explored. Greater understanding of the shopper needs and wants is key, as the drive for mass consumption of brands moves towards experiential and conscious consumerism, amid a technologically divergent population of travellers.