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When I started working in the global travel retail channel 25 years ago, the loudest debate centred around how to increase consumer penetration into stores. Even today, this continues to be a key question, as it’s still the case in many airports that a very small percentage of travellers actually enter a retail outlet.
Listening to brand owners and retailers speak at various events in recent months, a number of other questions have surfaced that have become vital for the channel to answer.
How does global travel retail take advantage of beverage alcohol trends in local markets and bring them to the channel quickly?
It often feels that GTR is slow to see – and take advantage of – trends that affect domestic markets. There’s an added complexity in travel retail due to the wide number of different nationalities travelling through airports, meaning that trends in a number of key markets require identification. The trends that need to be monitored could be at the category (the strong growth of tequila, for example), brand (emerging hot brands), or consumer levels (cocktails at home).
Retailers should keep a close eye on what is happening in both the on- and off-premise channels. A great way to spot trends is to ask bartenders what’s on-trend among their patrons. Brand owners play a key role in helping retailers spot these trends and ideally would incorporate this as a topic into their meetings.
The time that retailers take to react to trends is critical; as soon as they see a wave starting to break, they should jump on it rather than wait to see where it goes – and potentially miss out on a big opportunity.
How do you make the alcohol offer in GTR attractive to younger LDA travellers?
A whole new generation is starting to travel independently, many of whom aren’t accustomed to shopping in the channel. These consumers research what they want to buy online (and often make their purchases there as well). They’re massively influenced by what they see on social media and by influencers. Purchasing products in travel retail stores, therefore, is not something they normally consider.
In order to survive, the channel needs to make itself relevant and attractive to this new wave of travellers. The first step is for brand owners and retailers to learn more about this new traveller and what will motivate them to shop when they’re travelling. Understanding travel occasions – and how products can enhance and complement them – has a big part to play here.
Digital and social content and engagement are vital to catch this new type of traveller. The retail experience needs to shift from being transactional to an experience – but what does this look like for the next generation? Making sure the available brand is relevant will be critical; for example, younger LDA consumers are less likely to be interested in higher-priced, rare spirits brands, but in more accessible products that they’re already consuming in their domestic markets.
What are the barriers to conversion?
Understanding what the tipping points are, from browsing the alcohol section in a GTR outlet to making a purchase, is extremely important. Everyone’s goal should be that when a traveller enters a store, they don’t walk out without making a purchase. These tipping points can vary – by nationality, by the reason for travel and by the travel retail store location – and are critical for brand owners and retailers to understand.
Barriers to purchase are equally important to know. I recently decided to buy a bottle of gin in an international airport outlet, but abandoned the purchase when I encountered a very long checkout queue.
Research can help identify the tipping points and barriers. I’d encourage brand owners and retailers to also gather this information from shop staff, then use their insights to increase the number of conversions.
Is GTR a recruitment channel for brands?
According to research, the answer is a resounding yes; more than half of shoppers claim they’re buying a brand for the first time at an airport. This is important for brand owners and retailers to be aware of, as it means there’s a role for the channel as the place where consumers consider purchasing a brand they haven’t chosen in their domestic markets before. This could mean experimenting with new brands or even buying into a category for the first time.
Perhaps this isn’t surprising, given the ‘discovery’ mindset that travellers have. What it means is that GTR should work in sync with domestic markets to recruit consumers, playing an important role in driving brand awareness and trial.
By identifying and answering these important questions, brand owners and retailers can hone their strategies to help grow the GTR channel and ensure a healthy future.
This article has been available to Global Drinks Intel subscribers since August. For details on how to join them, please click here.
