Adrian Pittaway, Owner & CEO Cruise Retail Academy: Straight-Talking Cruise Retail With Peter Marshall
7 minutes read
Peter Marshall (PM): Adrian, welcome to TRunblocked.com. You really need no introduction, because you’ve enjoyed many years at the helm (sorry, simply irresistible!) of the cruise retail industry. So let’s start by asking you how you see the industry evolving in the coming years?
Adrian Pittaway (AP): Thanks Peter, great to be here and talk to you today. Cruise retail is in the middle of a truly exciting phase of growth and evolution. Large numbers of incredible new ships are coming to market coupled with a strong passenger growth, projected to be at 40 million guests cruising per year by 2028. Cruise retail remains at the heart of all ships and continues to grow in both space, scope and performance onboard. It really is an exciting opportunity to take part in the most dynamic and adventurous part of the travel retail industry.
PM: In travel retail, it’s quite clear that one size does not fit all. Can you briefly outline the key differences between the cruise retail business and the other sectors?
AP: As a travel retail business, cruise retail like the rest of the sector is predominately based on a strong value proposition. But there is where the similarities end. Having worked in both sectors, I can tell you that cruise retail is the opposite of airport retailing. Whereas airport retailing is based on low amounts of time, high amounts of space, high levels of gift and low levels of immediate consumption, cruise retail gives the opposite to this. Here there are high amounts of dwell time (usually around 7 days), low amounts of retail space (using all opportunities / spaces to sell), low levels of gifting and very high levels of immediate consumption (cruise retail is a buy now use now business model). I will cover this here on TRUnblocked in more detail in a future blog post.
PM: What, then, do you see as the main challenges facing the main operators in the sector, and what are your best recommendations to deal with them?
AP: As I see it, the main challenges for cruise retailing are 4-fold: pricing, staffing, logistics, differentiation.
Pricing – The challenge comes in 2 directions for the operators, firstly the cruise lines are generally requiring a robust MAG from cruise retail operators, and secondly the price model is being challenged more and more by cruise-focused domestic competition in ports, along with regulatory challenges. This means that many cruises are now not tax free.
Staffing – The huge growth in the cruise industry along with ever increasing opportunities within traditional cruise retail job markets, alongside high turnover levels, means that the demand for staffing and the number of new staff entering the industry has never been higher. Therefore, to achieve high guest satisfaction the need for strong training / motivation has to be delivered continuously.
Logistics – The increasingly global nature of cruise lines means that the logistics of meeting the needs of each moving ship in an ever complicated, diversifying market is intense. Each operator is having to really apply the strongest problem-solving skills to overcome the continued challenge of meeting an efficient supply chain in a timely manner.
Differentiation – The cruise market is evolving fast. New guest profiles are emerging. The 10 million guests that the industry will add between 2023 to 2028 are requiring something new, innovative and different from their retailing onboard. Therefore, the traditional product model is requiring operators to think creatively and distinctly in order to meet the needs of each specific cruise line partner’s changing clientele.
PM: Interestingly, a lot of brands seem to think that cruise retail is an easy fit within their travel retail portfolio. Is this the case?
AP: Absolutely not. Brands that enter the cruise retail market need to strap themselves into the ‘rollercoaster’ and be ready to experience a high adrenaline adventure. Cruise retailing is not for the faint hearted. To think of it simply as an extension of a travel retail department will end in failure. Cruise retail setup needs a long term perspective and distinct understanding of all of the challenges from the outset followed by a clear strategy. The brands that succeed in the cruise retail market all have one thing in common – a clearly differentiated business model designed and set up for a global, ever moving and volatile marketplace.
PM: So now you’ve set up the Cruise Retail Academy. Is it a question of game keeper turned poacher? Seriously, you wouldn’t be doing this unless you genuinely felt there was a genuine market need. Please take us through the key reasons for establishing the business.
AP: If we can find, mentor and support the next generation of cruise retail talent entering into our industry – to be able to give great guest experience from the outset – then one of the biggest industry challenges is lessened somewhat.
Having sat on the other side of the desk for many years, I could see that we, across cruise retail, all faced the same issue. From operator to brand there is simply so much complexity, fragmentation, change and worry, it was nearly impossible to find a formula that ticked all the boxes. My idea was to try to address the ‘elephant in the room’ at the heart of the industry – simplification. Creating a business that will be able to work proactively with any operator, with any brand and with any individual working onboard was the heart of the idea. A trinity approach to solving the recruitment, training and development issue that has been a challenge at the heart of this industry for years.
PM: I know it’s still early days, but can you give us specific examples of what you have managed to achieve thus far?
AP: Sure. The first thing we did was open the Academy for onboard professionals to join and connect into a professional network. So far, we managed to become a bit like a ‘lighthouse’ for a number of individuals, and have had over 4,500 people sign up from over 100 countries. I hope to achieve 10,000 members before the end of this year, which would cover the vast majority of the cruise retail ‘shipboard’ community. Next, we have started to work with a number of major brand partners to get their training / webinars into our app so that we can connect their brand USP with motivated individuals. We have had over 3,000 training courses completed across a wide variety of subjects giving individuals the opportunity to gain brand-led accreditation on their own initiative. We are then also working with the majority of the cruise retail operators to find new talent and get these people trained to a ‘brand standard’ before they even embark for the first time ensuring a great guest experience from the get go.
Meet Nelson. We found Nelson as a barista working in a hotel in Bahrain.
With the support of the Cruise Retail Academy support, training and dedicated recruitment process, Nelson took the initiative himself with us to train on many different topics and courses (such as Louis XIII brand accreditation), and when he stepped onboard his cruise ship Norwegian Encore, the feedback from senior managers was that he was truly ready to add value and give great guest experience from the outset. If we can create a conveyor belt of “Nelsons” for the industry, then my reason for establishing the business is achieved!
PM: You have very clearly outlined the need for how your business can support the different layers within cruise retail. If we look at what should change now, what are the most important areas that need addressing?
AP: I think that brands need to build and create a distinctively efficient cruise retail strategy that is aligned globally. It is not a business model that works regionally or simply as an extension of airports, simply because of the placeless, unique nature of cruise ships. This efficiency is what we built our company from, and I would recommend brands do likewise. Understand that cruise retail is all about people buying from people anywhere at any time. It is the foundation stone of the business model, so why would people buy your brand?
The answer is actually pretty straight forward. Despite the increasing diversification of the cruise industry, it is true that onboard retail staff will sell what they are confident in achieving the best sales performance from, and therefore getting the passion for your brands into their hands is vital. The easier and simpler we can do this, the more effective we can achieve success across the 350+ major cruise ships operating across the oceans.
PM: This is all very insightful, Adrian. Thank you for your time. I’d also like to take this opportunity of letting TRunblocked.com’s readers know that they can now expect to see regular features from you on our website, covering the key dynamics of this burgeoning sector and providing valid and valuable perspectives that operators, brands, design and logistics companies alike can benefit from. So, what’s up next?
AP: Of course it’s a real privilege to share with TRunblocked.com’s readers some insider knowledge into the truly unique underpinnings of the cruise retail industry. There are many great insights for us to share with your followers and community. So we are going to cover key topics that hopefully everyone will find useful. First up, we will take your readers up the gangway and onboard to better understand the most important areas in more detail. So the first thing we will cover – and probably the most misunderstood part of the cruise retail channel – is to explain the differences to airport retail. We will do this by explaining the reasons why the two channels are so different and how brands need to leverage completely different strategies in each respective channel to be truly effective.
