Tourism industry has seen great exposure in recent years. Increasing interest in roaming around the world from individual solo travelers as well as groups of friends or family has been beneficial for the travel and tourism sector. One such important sector of the travel industry which is experiencing growth is travel retail.
Rise in the number of shoppers while traveling is observed with an increasing number of travelers. Also, company policies such as the remote location of working from home, and working from vacation which is profoundly called workstation is allowing people to travel more. Furthermore, governments developing better flight connectivity between travel locations is also benefiting travel retail.
What is travel retail work?
Travel retail basically refers to sales made in travel environments such as airports, cruise ships, and others. Here customers or shoppers require proof of travel to access the commercial area which is subject to taxes and duties i.e. duty-free stores. Travel retail revolves around the purchase made by travelers and there are different types of purchases made.
The very first one is the last-minute purchase which is usually impacted by fear of not having something or missing an important travel gauge. Travel retailers spot this problem and provide solutions to travelers’ demands which positively impacts the overall airport experience. Another type of travel retail purchase is driven by the convenience of being able to shop at the airport. Whether it is to pass time during travel or to cut down the holiday shopping time by purchasing goodies at airports or cruise ships directly.
Luxury shopping is also an impactful purchase made that helps the travel retail sector. Consumers are willing to take full advantage of removed duty on luxury brands and products. The food and beverage sector is also a very important aspect of travel retail. With strict airport liquid regulations and limited food options on flights, the food and beverage shops acquire great sales.
Four Channels of Travel Retail
The travel retail sector mainly involves places that revolve around travel and tourism. There are four channels that drive travel retail and are as discussed below.
It is one of the main channels that drive the travel retail industry. Stores and food stations at the departure and arrival areas of the airport provide a shopping experience to the air transport traveler on the go. Airports are the main attraction when it comes to duty-free shops and shopping.
Advancements in digital technology enable travelers to shop during flights. It can be an inflight purchase or pre-ordered purchase made through digital entertainment offerings or printed catalogs. This mode of travel retail has the undivided attention of passengers but requires selective strategies to be more profitable.
- Cruise Ships
An increasing attraction for cruise ships and ferries is enabling travel retail to grow in this area of travel and tourism. Opportunities to shop and explore travel retail offerings while traveling internationally from port to port provide a great way to pass time during travel.
- Downtown Duty-Free Stores
This channel of travel retail allows international travelers to shop tax-free goods directly or reserve them for pick up after customs at the airport. It provides the opportunity to buy international luxury brand products without paying any extra tax for it.
Driving Factors of Travel Retail
The rise in the travel economy has propelled the number of travelers which eventually increases travel purchases. An open plan set up at the airport allows travelers to use their free time in browning and buying by providing access to brands and items which are generally may not be available at local malls. In recent years’ travelers have shown more interest in en-route shopping.
Additionally, retailers are more focused on providing better service to customers by using data insights. It is observed that travel retail provides a tremendous opportunity to be visible to the customer and showcase new products with seasonal upgrades. Such efforts from retailers will help the travel retail industry to expand more in the near future.