By Tim Young
Global. Travel retail exclusive is a term to describe products that are sold exclusively in Travel retail stores and are therefore not available for sale in domestic markets in shops or on-line anywhere in the world. They can be found in many categories including fragrance, cosmetics, confectionery, books, and spirits. In the world of spirit brands, there are more travel retail exclusive products than ever with packaging and product characteristics that differentiate them from domestic market offerings. Look at every spirit category and you will find travel retail exclusive products. The limelight, however, goes to whisky and single malt whisky in particular. In researching this article, I found that one airport retailer’s online single malt range is comprised of over 60% Travel retail exclusive whiskies. However, is this good for shoppers, retailers, and brand owners and what does the future hold?
A lot of things have changed in the 35 years since I made my first purchase of a bottle of whisky in a duty-free store. Shoppers are now far more price aware and can immediately compare the price of a brand they see in a travel retail store to their home or destination country using their mobile devices. Brands are also much more readily available and easier to buy in domestic markets and there is abundant discounting in supermarkets. However, being able to find something special and different has not changed, it was just that 35 years ago the uniqueness came from finding a bigger one-litre bottle of your favourite brand or a brand at ‘export strength’. They were not called travel retail exclusives then, but there was a point of difference to the high street and there was a pleasure in buying something exclusive, unique and at a lower price.
Price savings have always been a major reason why shoppers buy in travel retail stores, after all that is what the whole concept of duty-free shopping was built around. However, for some travellers, depending on their destinations, price savings are not always available or meaningful for their favourite brands. Travel retail exclusives really became a focus after the abolition of intra-EU duty-free in 1999. With suppliers and retailers suddenly faced with the elimination of the duty savings element were looking to avoid domestic market price comparisons. Travel retail exclusives were a solution. That was also, incidentally, when the term duty-free mutated into travel retail.
Fortunately, price is not the only reason shoppers make a purchase and there are many other inter-related reasons. Buying a gift for someone; a treat for yourself; a recommendation from shop staff; a souvenir of a trip; convenience; passing time during a long layover and receiving an added value in the form of a gift with purchase item all spring to mind. Travel retail exclusive items are also on this list. They satisfy a traveller’s need to discover and take home something different and they want and expect to find them. Travel retail exclusives are playing an ever-increasing role in the reason why shoppers make a purchase, and this is being fuelled by a stream of new exclusive products coming from brand owners.
Travel retail exclusive products take many forms. They can be product related with new flavours, ages, production techniques and strengths or they can be packaging led with special gift boxes or labels. Some brands choose to have products for a specific event such as Chinese New Year, create a collector’s series and have regional or retailer-specific exclusive products.
Brand owners and retailers have a long list of reasons why travel retail exclusive products are important. They avoid price comparisons with domestic market retailers. Premiumisation is possible with higher retail prices and enhanced premium packaging. They offer an opportunity for increased creativity and stand out at the point of sale in-store and on-line and provide something new to talk about. If they are retailer or place-specific, they can help strengthen relationships between brand owners and retailers. Last but not least if done well they drive incremental sales and value growth.
However, brand owners need to think carefully about when in a brand’s life they should introduce travel retail exclusives. Brand’s need to be known and established first before an exclusive offering makes sense. Some questions I would encourage them to ask themselves are:
[] At what point in the brand’s lifecycle do you introduce a travel retail exclusive?
[] Does it have a point of difference that shoppers and retailers will care about and adds value
[] Does it add equity to the parent brand? Is it recognisable and relevant?
[] How can its exclusivity be clearly communicated to shoppers? Should this be on the bottle or pack?
[] What controls are in place to ensure it doesn’t get sold in domestic markets?
[] Should exclusivity be for airports only or extended to other travel retail channels?
Travel retail exclusives are an important part of any retailer’s assortment; however, it is important they don’t take all the limelight. Many shoppers want to be able to buy the core brands they see on their High Streets. For brand owners travel retail gives access to shoppers from markets where they want to build awareness and sales for their core brands. For brands looking to establish themselves travel retail is a great place to find and experience them for the first time and therefore this becomes unique in itself. Also, travel retail exclusives are not just important in airports; shoppers on cruiselines, ferries and border stores are also looking for exclusive products.
Travel retail has always been about discovery and a place to find something new and different. Travel retail exclusive products help to create and make the shopping experience special and unique. The nature and importance of travel retail spirits have evolved and grown over time and arguably there has never been a more important time for them. They will continue to play a critical role in the continued growth and health of the travel retail spirits industry.
Global travel-retail veteran and emerging markets spirits business specialist Tim Young heads a beverage consultancy in London called Young Spirit Consulting. Contact him at: [email protected]
