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Flight Centre Travel Group
Embracing Emerging Travel Retail Trends
Rita Neville
As the pandemic transformed consumer behaviour, retailers need to embrace new trends by approaching them with renewed traditional offers
The pandemic has caused a huge shift in the travel market, which has greatly benefited the travel retail industry. For example, less traffic and greater concerns related to Covid-related delays at airports led passengers to spend longer periods at airports, pushing up the free time available for shopping. This transition accelerated several trends in travel retail, where the digital effect became more prominent. The omnichannel strategies of retailers and brands have increasingly influenced customers, and e-commerce is now driving up pricing transparency.
Along with this, new forms of competition like social media use, music, and video streaming compete to help passengers kill time. The variety of offers at airports focused on luxury, or high-end items is becoming less attractive. Travellers today expect experience-based events like virtual ones over traditional airport shopping. Thus, opportunities are increasing to capture and utilise passenger data.
How Can Travel Retailers Adapt to These Changes?
These transitions and trends conclude that travel retail players must adapt to survive. Retailers, airports, and the whole ecosystem must adopt the new market system. They need to focus primarily on revamping their conventional offer to embrace the new structure.
Revamp the Offer
The first step to revamping the offer is to refocus on core passengers. Travel retailers are aware of the fact that some passengers spend more than others. Their traditional offer has embedded a premium element, such as designer stores, upmarket boutiques, restaurants, etc., to serve them. However, this low-volume, the high-value market was seriously hit by travel restrictions placed on spenders. Consequently, airports need to refocus their offer on their core passengers. Retailers must embrace their product assortment and merchandising to appeal to the growing share of low-cost passengers who, despite being on a low budget, do not necessarily have lower spending power at the airport.
The next step is to renew formats, where retailers must stay fresh and frequently reinvent their formats. It can include pop-up stores, shop-in-shops, live performances, and games. Combining modularity into the design of commercial spaces supports renewing models. In addition, travel retailers must modernise concepts as the mere transactional approach to travel retail is no longer applicable. They must create concepts like retail-as-a-media, where gathering data points from travellers is more important than making a sale. This involves displays on which customers can try out new products if they register first.
