In 2022, Advantage Group is relaunching the Global Travel Retail Program after an almost three-year hiatus. The travel retail industry caters to shoppers in airports, airplanes, cruise ships, ferries and railway stations. The industry is vast and will continue to grow; it is forecasted to be worth USD 174.86 billion between 2021 and 2030. However, a relaunch of this proportion in a relatively uncertain world requires more than an optimistic prediction.
How realistic is recovery for the travel retail industry?
The dormancy in the travel retail market for the last few years is over. The industry is experiencing a faster-than-expected recovery. In the previous two quarters, 70% of travellers (compared to 2019) have returned to travel. Additionally, consumers are spending more. The average spend per customer is 15% more than in 2019, which experienced relatively high spending then. The entire industry is expected to recover by the end of 2023 fully.
The industry’s speedy recovery doesn’t mean stakeholders will have it easy. As business priorities in travel retail become increasingly complex and consumer habits change, the need to listen and learn between retailers and suppliers has never been more essential.
“It starts with the journey of the traveller. People, when they travel, are full of feelings and emotions. That is what retailers and suppliers are trying to capture by building a smooth and memorable experience together. If there is a purpose for our Global Travel Retail Program, that would be to support retailers and suppliers through engagement in delivering what the traveller is looking for along their journey.”Christophe Bouyé, Advantage Group International Managing Director Global Travel Retail
Emerging travel retail industry changes
The Global Travel Retail Program has readjusted to accommodate the inevitable changes arising from emerging trends and evolving shopper behaviour and is now ready to support relationship challenges and mutual growth.
Advantage Group International Managing Director Global Travel Retail Christophe Bouyé is leading the relaunch of this program. From his discussions with retailers and suppliers this year, there are three significant shifts and challenges to be aware of: digitization of the market, the absolute need for differentiation of products and services, and supply disruptions.
Most retailers are moving towards digital platforms while attempting to create an experience for shoppers by linking their physical and virtual stores. Travellers are becoming more digitally adept while competing and evolving in the current market is increasingly challenging for retailers. Railways stations, ferries, airports and airlines must take advantage of the eCommerce uptick during the pandemic and integrate it into the consumer’s experience to combat the inevitable shift away from conventional travel retail.
Digitization and eCommerce have their advantages for retailers. They can customize promotions and product offerings according to real-time transportation data (e.g. incoming origins or outgoing destinations) while potentially having access to other digital touchpoints in the travel industry. Digitization also provides opportunities for personalization and engagement with the consumer—two elements that are likely to attract shoppers.
For retailers, the challenge that always existed and will continue to evolve is ensuring that the products they offer provide value to customers that cannot be duplicated elsewhere. According to Christophe, if retailers want to influence consumers to buy, then their product offerings must be relevant to the journeys of consumers.
However, as previously indicated, travel retailers are changing the type of experience that they want consumers to have. The experience must be augmented and not as low-key or understated as it was in the past. With the rising costs of travelling, the need for a better retail experience becomes more critical. Consumers expect more if they are paying more.
- Supply disruptions
Supply chains around the world have experienced disruptions. Retailers are at the forefront of ensuring that their products are delivered on time, in full, and at the correct location. Alternatively, suppliers expect more communication and collaboration from retailers to help them fulfil their inventory deliverables.
How is Advantage Group adjusting to these changes in the industry?
Advantage’s priority is ensuring clients receive the most up-to-date and effective insights from Advantage Report. Our current survey is designed to accommodate organizations in the FMCG world. The global travel retail industry requires a slightly different approach to account for digitization, differentiation and supply changes.
To ensure that retailers and suppliers receive the most relevant data and insights from Advantage Report, Christophe and his team analyzed the changes in digitization, differentiation, and supply to adjust and refine the competencies in the Advantage Report survey. These alterations won’t just produce more valuable data and insights. They will also help retailers and suppliers communicate and collaborate more effectively—the key to combating current and future industry changes.
Navigating the constantly changing travel retail industry is challenging for retailers and suppliers. With Advantage Report, we can help improve your listening and understanding of your business partners through data, insights, and action planning. Connect with Christophe today to learn more.