An experimental space for brands which not only can develop real client experience but can also make travel more fun. Growing demand with substantial investment in the travel and retail market has led to the emergence of travel retail industry which is nowadays playing a pivotal role in brand strategies.
We all love a bit of shopping when travelling, don't we? With a brighter future and unprecedented growth, travel and retail are coming together with wide arms to promote exclusivity and convenience. According to the statistics, luxury travel is magnificently elevating with 6.4% growth rate which leads to the growth of this industry to approx $1.2 billion by 2020 whereas the overall luxury growth rate recorded is approx 4% in 2016. For the records, the global value of travel retail is ready to touch the mark of $85 billion by 2020. With such a cultivating scope, this monumental economy is called as the "Sixth continent". Reflection of reaching the sky with increasing financial stats, travel retail is prompting the retail authorities to diversify their approach.
As we are moving forward, let’s discover life on this sixth continent in more details.
When boarding pass gives permission to shop, gigantic airports turn into increasingly glamorous malls, the footprints of convenient and exclusive tailor-made services give you a kick to travel and shop, then you are entering the world of sales on board. With increasing acknowledgements and advancements, enormous changes in brand strategies can be witnessed in retail due to the emergence of tourists with changing consumption patterns that are leading to modifications in the components of travel retail value chain. Globe shoppers are the major component, who not only love to travel but also consider shopping as an integral part of it. Amongst them, 96% love to shop when visiting a foreign country, 68% plan their trips according to the available shopping opportunities. This excitiment among travellers is leading to the development of this sector.
With growth, not only the approach of the brands is changing but the client profile is also modifying itself with the birth of millennials in globe shoppers segment. "The formula 1 of retail", also known as "Airport sales" is attracting this specific segment of globe shoppers as millennials are emerging as the core customers of travel retail segment. While talking about airport sales, we can’t ignore DFS. And, who doesn't love Duty Free? We all do and that's why DFS is one of the preferred places to shop and hence, global duty-free industry is expected to grow by about $67bn by 2020.
Now, let’s learn more about millennials and know what makes this generation as the core customers of travel retail.
Instant gratification generation of Millennials - Photo: @Jamie Nelson
In this era of new consumerism with the new attitude towards retail and travel, the meaning of value is redefining and experience is becoming imperative. So much has been already written and discussed about this generation of digital comfort but what has actually not been covered much is how millennials can change the configuration of travel retail landscape? What makes them interesting for the brands?
To dig further, let's have an overview of the marketplace to understand what makes millennials the integral component of travel retail. Almost 1.8 billion millennials subsist in this world and they are travelling more than any other generation. Notably, they are more likely to travel in the coming years as their financial assets will grow. Found by Nielsen’s survey of Global Millennial Travellers, 63% of this generation has purchased a premium or luxury item in the past year. In fact, another 4% of them are planning to make a purchase soon when travelling. This disposition of millennials in travel retail nourishes an opportunity for brands to widen their spectrum of clientele as they hold the potential to be the core customers of the sixth continent. The growing statistics by millennials depicts potential business opportunities for retailers to increase their business aspects.
This interesting and savvy group of customers with distinctive approach to retail enables them to quickly access products in just one click. As they are carving their way forward with unique and fluid characteristics that make them stand out from other generations, travel shopping is becoming one of their strongest consideration. Notorious for their smart travel with strong potential and strongly driven by exceptional experiences, millennials are igniting the retailers to push their boundaries. With so much buzz around them, the question that emerges is: how to attract this new generation of buyers? Millennials with a global perspective are not only engaging with brands but also have a strong influence in brand strategies structured for them. As a result of this, brands are keeping millennials at the core of their brand strategies in travel retail segment. Something similar happened when Shiseido travel retail division targeted millennials in their latest approach by launching "Ipsa", a new skincare brand designed for millennials. Air france also joined the league by announcing Joon, its new airline targeted millennials which promises Virtual Reality experiences and a lot more.
Such targeted strategies by retailers are the ways to focus and expand their reach of clientele in form of millennials. As these young shoppers are creating various opportunities for retailers, it becomes crucial to unfold how to seduce them and increase airport sales? What attracts them inside the store at an airport?
Continuous quest for the right experience and uniqueness qualifies for their needs, desires and out of the box expectations. Such experience has been illustrated through experiential retail by Johnnie Walker House located at Beijing International airport as it beautifully encapsulates the brand values to offer an immersive sensory client experience. Also, Bombay Sapphire designed virtual reality campaign to educate travelers and impart a branded experience at Sydney International airport.
Desirable experience by Bombay Sapphire - Photo: @DFNI
Such immersive experiences make us buy even if we are not in the current state to do so? Have you ever experienced that when you enter a store? The answer lies in Impulsive Buying, which acts as a stimulus and ignites us to buy. And, this has been proved with Nielsen Survey, according to which one-third of the millennials believe that impulse buying and buying as a treat are primary purchase motivators for them when travelling. Therefore, what all millennials want is "experience" and its all about it now.
Travel more, experience more - Photo: @Mckinsey
Due to inevitable hike in the business of Sales on Board, this expanding industry of travel retail is providing various opportunities to retailers in order to entice this new generation of buyers. However, the catch is that millennials are demanding and unpredictable in their own different ways which demonstrate that the authorities in travel retail structure need to comprehend the insights of this lucrative young generation of travelers so that the retailers can adapt and ensure their needs.
By going with the financial stats, it is clear that Travel Retail is growing with a well-structured base, and is also developing its own economy, own capital, creating its own flow and structure. Luxury and Premium brands are trying hard to develop their own kind of Travel Retail with their different experience and product offerings for the new core customers: millennials. In the market that is reinventing itself with new opportunities and increasing demand, it is vital to provide these millennials what they seek for. Hence, sales on board revolution by millennials is seeing its sunrise.
Let’s WANDER and DISCOVER.