How Does the Development of World Tourism Affect Travel Retail?
Tourism is a fast-growing sector. We are seeing this more in recent years as we reach record numbers of visitors and tourism flow, and it is projected that this upward trend will continue.
The increase in tourists who are traveling more frequently has also resulted in a change in consumption habits, and in turn, the development of the tourism industry is in full swing and some major transformations have been affecting the entire tourism industry. A good example of this are the new developments that were shown last week at the International Tourism Fair in Spain (Fitur). But, how do all of these changes affect the retail industry?
The relationship between tourism and retail has also gone through a period of growth and diversification which in recent years has revolutionized what we call Travel Retail. In order to address the market's transformation, today we spoke with 3 Travel Retail experts: Patricia Rodríguez Mediano, Key Account Director at HMY, Pere Ruiz Fausto, Commercial Director of HMY and Pedro Solà, Sales & Business Development Manager of Bespoke Solutions at HMY.
As Pere Ruiz says, in order to understand how changes to the tourism industry might affect Travel Retail, we must first identify the main features that set the sector apart and analyze how the climate of travel has been transformed.
What Factors in the Transformation of Tourism Influence Travel Retail?
Pere explains that in order to identify the keys to success in Travel Retail, we need to combine data with the unique characteristics of the sector, which is known to be a growing market, with fast and impulsive transactions which occur in commercial spaces that are traditionally expensive.
If we focus on shopping areas in airports, all of the changes in tourism have led to the creation of spaces that are more and more adapted to the needs of customers who travel in search of experiences at every moment. Therefore, terminals now look for concepts that are more comfortable than functional, managed by private companies that take advantage of commercial and service profits more efficiently.
A Growing Industry
According to Patricia Rodríguez, travel has become increasingly accessible and attracts previously non-existent crowds who are exposed to this distribution channel.
Transformation of Retail Space Concepts
Concepts for retail spaces, which are now key to offering pleasant travel experiences, have undergone a complete transformation. Supplies and services have not only diversified, but there has also been a great effort to create memorable spaces thanks to brand presence. In creating spaces for airports and other transport terminals, there is a quest for differentiation and the creation of an experience.
The Evolution of Passengers
As we said at the beginning, tourism is growing internationally, due to factors such as improvement in the economy or air travel being more accessible, which facilitates international travel. All of this not only leads to there being more tourists, but that they form are a more heterogeneous group whose needs are very different from those of tourists years ago.
The Use of Technology in Commercial Spaces
Technology and communication also play a critical role in these new spaces and have made the purchasing process feel more like an experience than a mere acquisition. This has been shown to be in line with the wishes of tourist customers who, beyond wanting to purchase a product, also want to enjoy an experience and make memories to take back home.
The Keys to Facing the Challenges of Travel Retail in 2018
With these key points about the evolution of the tourism industry and the ways that commercial spaces are changing in airports, we can identify some key factors in the future of the Travel Retail sector.
Patricia Rodríguez Mediano, Key Account Director at HMY Retail Solutions, insists that the differentiation versus other distribution channels and geographical areas will be key to boost sales; differentiation based not only on product offer, but also on payment methods (Click & Collect) and customer purchasing experiences, which are is critical to success.
For their part, Pere Ruiz Fausto and Pedro Solà, Sales & Business Development Manager at HMY Group Bespoke Solutions, agree on some essential ideas for successful commercial areas in terminals:
- Expressing the idea of a travel experience in your offer: this new model of tourism means that there is a different way to travel, in which tourists are more immersed in the local culture, while still having access to global supply. As Pere Ruiz Fausto breaks it down: "Travel Retail = Local Values + Global Supply"
- Focusing on the passenger-customer: While movement through a terminal used to be seen as the tedious part of travel, now we are trying to turn passengers into customers who enjoy these spaces and feel comfortable in them. The new design of open spaces in terminals invites the concept of a "Walk Through."
- Creating shopping experiences through differentiation: purchases must be perceived as a set of unique experiences, in which the products offered are shown as something unique, which cannot be found elsewhere or by other means.
- Using technology: Completing a purchase must be easier and faster. To achieve this, we need to use the most advanced technology and accept new payment methods, such as Click & Collect, or create spaces where customers can interact with products and enjoy a unique experience.
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