Why Travel Retail can’t lose sight of the basics
As digital continues to dominate industry comment, it’s worth highlighting that the digital world and the analogue world of travel retail 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.
April 2016 | by Garry Stasiulevicuis, Managing Director
Travel retail is embracing the digital phenomenon – albeit slowly - by incorporating it into the in-store offering and using it to expand retail opportunities along the shopper journey. Whilst this is the right thing to do, it’s imperative that this is not done at the expense of the channels unique and traditional ‘bricks and mortar’ offer.
Shoppers know and love the retail showcase that this channel provides. The wonderful displays of amazing brands are the bedrock of attractive airport stores the World over. But 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.
Focussing on good category management or ‘ease of shop’ is essential. This ensures products are easy to find, easy to choose and easy to buy. The means having the right assortment in the right spaces, displayed correctly, communicated appropriately and complemented with exceptional customer service. This all 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 review the range on a regular basis.
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.
Here at CiR, 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 then 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. 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.
Travel retail is right to utilise digital to enhance the shopper experience; but the digital offer should be seen as 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.
Source: CiR database