BlogPotpourri

By: Pepi Sappal   •   email: info@trunblocked.com

Satisfying the needs of the ever-diversified whims of today’s international traveller is no mean feat. With so many regions coming into play and more travellers – from baby boomers to millennials – coming from the Middle East and Asia Pacific (and at almost twice the rate of visitors from Europe and the US), the DF&TR industry is struggling to satisfy the needs of all these diverse groups.

Although the TR market has tripled in size since 2002, as we know, the rate at which passengers are spending has slowed in recent years. Reversing this trend is dependent on the industry satisfying these ‘diverse’ needs. ”Diversity and meeting the needs of a broad range of travelling consumers is essential to any brand operating in travel retail”, confirms TFWA President Alain Maingreaud. ”While space in retail environments is often limited to maximise sales and revenue, retailers must look to provide the right balance between the familiar products each traveller looks for as well as the new and exciting to inspire”.

 

TFWA President Alain Maingreaud

CATERING FOR DIVERSE AUDIENCES

The Beauty and Spirits categories are both making huge strides to cater for their target markets – and reaping the rewards and profits as a result. Latest figures from Generation Research reveal that the Beauty category achieved impressive growth of +19.3% in 2017. That’s more than double the sales of Wines & Spirits, the second biggest category. Innovative product ranges and TR exclusives, coupled with ‘digital’ and ‘unique’ experiences from brands like L’Oréal, are certainly proving to be a hit with travellers worldwide. L’Oréal’s latest ‘Parisian experience’ in China’s Haitang Bay, operated by CDFG, is a clear example. ”Our goal is to lead the way in making beauty trends for all”, says Olivier Tessler, GM of L’Oréal Paris Travel Retail, APAC.

The Spirits category, as we have covered before, is also providing more craft products, and airports such as Changi have dedicated extra space to accommodate niche selections. Brands like Bacardi – and others – also create TR exclusive gift packs to take advantage of special international occasions like Chinese New Year, with timely gifting opportunities across Asia. Its latest Baron Otard XO Gold gift pack, for example, is creating ‘a powerful on-shelf presence’ to attract Chinese travellers this year.

APPEALING PRODUCT MIX

Maingreaud believes it’s vital that travel retailers understand the precise demographic of those who visit their stores as well as new customers. ”They can only satisfy these shoppers if they provide a product mix that has appeal to all”, he states. In a bid to better understand and satisfy specific group needs, many brands and travel retailers are now using passenger/buyer segmentation and traveller profiling data more than ever to get the ‘right products to the right travellers at the right time’.

The Confectionery category is also doing particularly well at meeting the needs of millennials, as are many Beauty brands, notes Lawrence Scott, Industry Advisor, Travel Retail at NPD Travel Retail. Nestlé’s latest KitKat activation, for example, focuses on various millennial traveller profiles ”by encouraging them to digitally interact with the brand and hashtag their purchases with the mantra #liveyourbreak”, says Scott.

Nevertheless, there’s plenty of room for improvement. Travel retailers could do much more to fine tune product selections for different traveller groups, according to trade analyst Jerome Goldberg, Global Retail and Travel Retail Division Director, ForwardKeys. He believes ‘travelling corridor information’ and ‘dwell time data’ actually provide a sharper vision of the ‘true buying potential’ at an airport.

RELEVANT ‘FINE TUNING’ DATA

”For example, at Heathrow, only a certain number of Chinese will fly home directly to Shanghai/Beijing, while others have planned a transit via Helsinki, Moscow or Dubai. This type of traffic data can have an incredible impact when used cleverly as it gives brands/retailers the right knowledge to pinpoint the exact location as well as best time/window to maximise their offer”, explains Goldberg. ”Relevant peak hour data can also provide vital insight in terms of when to modify service/marketing campaigns. For example, when to have more Chinese-speaking staff on duty or when to double the rotation of digital ads in, say, Russian”.

Retailers obviously can’t change their product ranges from one hour to the next. Yet Goldberg believes that this type of real time traffic data can help retailers to modify a product selection/campaign/service faster to better meet passenger expectations, and ultimately to increase spend. ”However, too many players are still relying on departing time and destination to reach specific passengers and missing big opportunities”, he states. Although Goldberg has noted more demand for ForwardKeys’ data services from the industry, traction is slow, with many still testing the waters through trials/pilot schemes.

If the industry is to successfully satisfy the ever increasing and diversified demands of global travellers, it needs to invest in more data analytics, digital technology, AI and, of course, the necessary ‘human’ resources. No doubt it’s an issue that will continue to be discussed at the upcoming TFWA China Century Conference, the Trinity Forum and the Global Shopping Forum later this year.

Peter Marshall

Founder: trunblocked.com/Marshall Arts
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