The Internet of Things: Transforming the Travel Retail Landscape
The Internet of Things is rapidly evolving the way people shop and the travel retail industry is a prime candidate to benefit from the resulting shift in consumer and shopper behaviour
August 2015 | by Alison Hughes, Research Director
Over two decades ago, it was predicted that the Internet of Things (IoT) would be an integral part of everyday life; connecting our devices over the internet for improved convenience and efficiencies in everyday life. Smartphones, smart watches, smart homes and smart cities – these are just a few examples of the ever growing reach of the Internet of Things. However, this advanced technological concept does not stop at changing how we work and how we live, but also how we shop.
Currently, more than 10 billion devices are connected to the internet – more than the earth’s population and that number is expected to increase to 50 billion by 2020 according to Cisco. The opportunity for travel retail here is clear, some sources predict that this mass connection will add $14 trillion dollars in profits to those businesses that accept and adapt to the Internet of Things.
The Empowered Customer
The travel retail industry must look to create an omni-channel approach to selling goods. Already, it can be said that the biggest stores in the world are Amazon and Alibaba; both companies have captured huge portions of the retail market without having brick and motor stores. Although some travel retail operators provide an on-line presence, the questions remains how this could be further improved and wider connections made between the traveller, carriers, airports and retailers.
The Android and Apple app stores are filled with applications that make shopping easier and more consumer-strategic; from apps that buy travel tickets when the fares are at their lowest to apps that crawl the internet to get you the cheapest prices on everyday products. But few, if any are for travel retail related buying opportunities.
But it’s not all about price. Travel retail should all be about experience. Be it on-line or in the airport, customers are seeking convenience and a personalised service or attention. Yes, the Internet of Things is rapidly evolving the way people shop and travel retail must embrace this if they are to succeed.
Mobile, Mobile, Mobile
In our recent Digital Study, we revealed that more than 70% of travellers will have a wi-fi device with them while at the airport. Clearly mobile devices and apps are rapidly changing and reshaping customer behaviour and experiences. Unfortunately, the slow response of several companies to adapt to the ecommerce disruption can be witnessed in travel retail. Travel retail should be innovating by investing in mobile friendly websites, make it easier for customers to find their products online, simplify online purchasing, setting up mobile payment systems, and build a bigger more connected presence on social media platforms.
Taking it many steps further, smartphones are now sentient-like devices, displaying the ability to act like sensors and broadcast signals that present valuable information and insights; data that can be acted upon. Via geolocating, retailers can now offer location specific deals; using Beacons to send notifications to customers’ smartphones about onsite deals or coupons upon entering a store. With more than 60% of travellers being open to receiving messages on deals and promotions while in the airport, those travel retailers who adopt this technology are sure to benefit from increased footfall and conversion.
Build Trust, Create Relationships
Global retail is now local. An internet enabled device allows everyone to shop anywhere. Travel retail is made up of shoppers without borders. Mobile now means that travellers have unrestricted choices. How should travel retail stand out and stay relevant? Certainly not just with traditional marketing techniques but by building trust and creating relationships with customers through multiple levels on interaction. In today’s fast paced business landscape, repeat business and customer loyalty are the mainstays of successful retail businesses.
The Internet of Things highlights the personalisation of retail, and the emphasis on shopper / customer-retailer relationships. It also aids businesses in forging these relationships by allowing real-time access to customers and their information. As a result, retailers can produce targeted content, highly personalised communications and ensure a customer-centric experience.
The word “things” in the Internet of Things can mean just about anything, both on the consumer and supplier side. Beside conventional internet enabled devices such as computers, tablets, smartphones and wearable tech, the Internet of Things also includes point of sale machines, card readers, scanners, sensors, cameras, communication networks, inventory management systems, digital systems, social networks and cloud systems. When done correctly, these devices provide points of data entry and data storage sites that are organised, scheduled and classified, ready for detailed analysis to present added value to customers. Essentially, travel retail has the opportunity to create a thriving ecosystem around their shoppers, customers, products and services.
The Internet of Things will no doubt push retail to reinvent their processes and strategies for a digitised retail market. Products will be repackaged through convenient services, services will be revamped to be unique customer experiences, and customer data will be entered, stored, analysed and acted upon to the greatest level of personalisation. With travel retail, the digital transformation has begun and there is no going back.