Travel retail shops

What characteristics and dynamics influence a purchase.

Find out why you should carefully select the retailers with whom to enter into trade agreements, based on their sales areas and which specific requests you should express about the way to display and present your products.

Bringing the products you have in the catalogue into the duty free is certainly a victory; it is the main aim of achievement that professionals like myself strive for 365 days a year, but is certainly not enough. Not all retail spaces are the same, not all guarantee the same conversion rate of visitors into customers, especially if your products are not efficiently placed and displayed how they should be.

Sociologists, psychologists and marketing professionals have been conducting studies for years about the way in which the design of a retail space influences purchasing dynamics. We must find how to identify the right location for your products and the specific corner of the shop able to ensure you the best conversion rate. As you will see, it is not only spatial elements that matter, but, overall, everything that is able to act on each individual sensory dimension.

DESIGN

From crossing the entrance, right up to the checkout, all the design elements of a shop have an influence on the conversion rate of visitors.
Knowing the most common design strategies will guarantee you the possibility of expressing specific requests about the location of your products and understanding why sometimes, a product of one of your competitors is purchased more, even if it is more expensive and of a lower quality than yours.

The decompression zone
The shop entrance is the place where your potential customer is experiencing a real transition between two worlds, the outside of the shop and the magical world of duty free.
The clear majority of duty free shops around the world is structured to have multiple access points, so each of them functions a s a decompression zone.
In this area, customers have an initial idea about what the entire range of products offered to them is, especially in terms of quality.

Certainly, this area is extremely important in defining the entire purchasing experience, but, I guarantee you that you don’t want your products to be located here. This is because customers tend to not consider products located at the entrance as they are in the transition phase and still haven’t immersed themselves in the shopping mood.

Immediately to the right
Already consolidated statistics state that 90% of customers of a shop go immediately to the right after experiencing the transition at the entrance. The display to the right of the entrance is defined as a “power wall”. As you will have understood, this space has enormous potential in terms of converting visitors; ask for your products to be displayed here.

Follow the route
The design of a good shop, duty free included, is always developed to provide routes for the customers. This does not occur only with physically fixed routes, as in the famous case of IKEA sales outlets; the indications given today to customers are much less explicit and require no walls or barriers. Identify the points in which a change of direction is subtly indicated to customers and ask for your products to be displayed there. You can recognise these places by the presence of a sign with an offer or, much more frequently by the display of a product ably to capture the attention the most (e.g. a stand of confectionery products).

Slow down
The final goal of every retailer is to lead customers to purchasing as many products as possible. The study of specific routes is exactly for this. But if customers, maybe because they are already sure of what they want to buy, finish the route too quickly and end up purchasing few products, if any at all! In this case again, the decades of studies on this field have come up with a solution: the insertion of pause points, places where there is a break with the layout of the shop, which reactivate the customers’ attention. You can recognise these places by any “visual break”, aesthetically inconsistent signs or stands compared to others (e.g. a wicker basket with ……. your products maybe?).

THE 5 SENSES

The whole purchasing experience is influenced by every sense, all five of them.
Specific cognitive processes that favour the purchase are triggered by certain sensorial stimuli. This is the reason for careful study on duty free lighting rather than on the temperature of the places. Customers don’t perceive these elements as marketing messages but are still influenced by them. Well, avoid any cold location, (it is scientifically proven that warm places favour purchasing); ask for your products to be displayed in a well-lit corner (80% of sensorial information the human brain uses comes from sight), take noise into consideration (too often, but inevitably, ruined by airport service messages).
You should ensure that the packaging of your products conveys a pleasant tactile experience and, in the case your products, like mine, fall within the Food & Beverage category, read the next paragraph carefully.

TASTING

If you sell clothing, you will rarely see a customer sniffing your product and (nearly) never see someone enquiring about its taste.
But what if you have products in the catalogue that their main standards are in their taste and smell? I have put a team of food tasting specialists in my team, because I truly believe in the power of my potential customers trying my products.

Despite having the advantage to be able to profit from the fame of the now universally recognised Made in Italy brand on my side, I have developed a series of services for my retailer customers to help them in better conveying the excellent quality of my products.

I offer two types of services: I provide my team to set up special stands or organise courses to train their shop assistants. My advice is to provide, maybe in those “pause points” that I mentioned before, some points for tasting your products.

I want to communicate one simple thing with this article: your work never ends after having placed your products inside a duty-free shop. Always ask for a floor plan of the sales outlets in which your products will be sold and, immediately after studying it, personally visit the shop, identify the best display area and implement a marketing strategy able to act on all the senses of your potential customers.

The packaging of travel retail products

Selling in the few seconds available

A couple of years ago, I was having dinner with two colleagues. One of them, specialized in the wine trade said something, probably trivial to me, which gave me something to think about for days: “Italians make silver wine from gold grapes, the French gold wine from silver grapes. Yet, French wines have greater success globally”; then carried on by saying, “it’s all a question of marketing, they are better at conveying a quality image, even through the label design on the bottles”.
So, everything begins with the packaging, especially when a brand still hasn’t reached great recognition on the market.

If you think that packaging is to be considered a mere container, because what really matters is the product and anyone can design it, then think again, you are losing out on an important opportunity.

For whatever reason you are taking part in the exciting world of travel retail, you will realise by continuing to read this article that you must focus greatly on the packaging of the products you work with.

I will never stop telling my employees and customers how crucially important the quality of products offered to consumers is. But it isn’t enough!
Packaging significantly influence purchasing decisions and neglecting this simple assumption will lead you to missing out on growth opportunities.

Travel retail, then, as we well know, is a world apart, full of peculiarities, even in the dynamics of the choice and creation of product packaging.

Let’s proceed in the correct order, by starting to delineate the functions of good packaging and its winning features.

PACKAGING AS MEDIA

The main function of the packaging of your products is to communicate with your potential customers. What?

Differentiation
The appearance of your products on the shelves of retail locations is firstly needed to differentiate them from competitors.
Imagine seeing, among many standard packs of rice (the classic cardboard box), a cylindrical tin with a nice label and, maybe, an unusual naming. Obviously, it will be the “strange” and well done package that attracts your attention. You may well decide not to buy that tin of rice (you would be making a mistake as it really exists – it is called Acquarello – and it is also very nice), but I bet that that brand would remain indelibly imprinted in your mind. Besides, isn’t the travel retail market, first and foremost, an exemplary global showcase of products?
Now, let’s change perspective. Imagine not being a customer but a supplier, who, with a great effort of energy and resources, has managed to “place” the rice brand he has in the catalogue on the shelves of a duty free. Would you really want to be the one who proposes yet another plain cardboard box?
For each product sector, travel retail customers find themselves faced with a wide range of possible products to choose from, often in very short times (e.g. between one flight and another), and your products must manage to show their uniqueness and attract attention efficiently.

EVERY DETAIL COUNTS, EVEN COLOURS PLAY AN ESSENTIAL ROLE

For decades, psychologists and marketing professionals have studied and classified, sometimes with conflicting results, the way in which the human brain responds to visual stimuli, induced by different ranges of the light-frequency spectrum. Different colours – and they all agree on this – lead to different and often recursive mental associations.

This means that in the presence of certain colours in product packaging, potential customers react according to standard mental associative dynamics. For example, products with white packaging transmit values such as safety and purity (yes – like wedding dresses). Even different shades of the same colour can convey very different messages. This is in the case, for example of “sky blue” and navy blue”; most people associate the first one to a playful dimension, and the second, to the symbolic universe that encompasses the characteristics of being professional and reliable.
But different cultures respond to the same colours in different ways. Yellow for example, is associated to joy in Europe, but to mourning in Egypt.

Therefore, should you also worry about developing different packaging versions of your products to adapt them to different regional markets? Yes, you should!

EXCLUSIVE FORMATS FOR TRAVEL RETAIL

One of the reasons that more and more often triggers purchasing products on the duty-free shelves is the uniqueness of the packaging designed for the travel retail circuit.
The classic example of this purchasing trend is represented by wines and spirits; according to a TFWA survey, exactly 49% of customers purchase wines and spirits simply because of their unique packaging.
Leading brands have long-realised this trend and consequently, continue to create special packaging for their products sold in duty free shops.
This is the case in the “Time for Tea-giftset” introduced, exclusively on the travel retail market, by the famous brand of Hendricks gin (the packaging is decorated with graphics related to the travel world).

SPECIALIZED AGENCIES

The packaging demand for travel retail is so high it has encouraged to creation of design agencies, specialised in the creation of packaging dedicated to duty free. They include, for example, Cheeeeese (www.cheeeeese.com/portfolios/travel-retail), based in different countries around the world, and the British Vivid Brand (www.vividbrand.com/views/travel-retail-spirits).

My work concerning the brands I represent never finishes with merely proposing their products to retail outlets. I recommend them as I do you, to always create packaging able to perform each of the functions listed below and therefore, to conclude, win the competition in those few seconds available when the customers’ gaze browses the products on the shelves:
– attract attention;
– communicate why your product is special;
– transmit the quality of your product;
– make the origin of your product clear (this is really crucial in my case of working with Made in Italy products);
– express, enhance and let the brand identity of your product by memorised.

Businessmen vs leisure travellers

What are the purchasing habits of the 2 macro-categories of travel retail customers in Europe?

Fully understanding end customers is without a doubt the first essential step to take towards the path leading to the creation of winning strategies; strategies that are able to comprehend wishes and needs and create excellent purchasing experiences.
It makes no difference in which market we work; we must always be in possession of data able to guide every single step of our strategy for the most important moment – the purchase.

From socio-demographic data to data regarding geolocation obtained from online browsing statistics, all information contributes to the fruitful structuring of our product portfolio, of our communicative approach and the follow-up plan of our vendors.

For many professionals in the travel retail industry, following this theoretical system may be too expensive or even useless. Some believe that given the intense flow of people at airports and other typical travel retail locations, profiling travellers is superfluous.
Why spend resources when it is possible to benefit from a prime location as a duty free?
The answer is extremely simple, practically banal: to transfer more value to the two main parties that determine the success of our business. In fact, knowing the singularities of each individual traveller category allows us to identify the characteristics of ideal customers for our products. Therefore, on one hand it enables us to have selling points to use with retail space managers who are intermediaries between our products and the end customers and, on the other, it allows us to study the best marketing plan to reach the latter.

As a last resort, there is no better investment than to best prepare ourselves to make informed business decisions through careful market research. Yes, it is true that the analysis path may be rather expensive from an economic and time point of view, but it enables having real competitive advantages.

The analysis to be carried out must be as much detailed and vertical as possible, but the levels of common study to start from, regardless of the product category of interest, can still be identified. An important example of this type of first level study area is the analysis of the purchasing habits of the two macro-categories of travel retail customers in Europe.
The following analysis is based on data gathered from the “European Travel Retail Study” of the Tax-Free World Association (TFWA); therefore, referring to the travel retail market in Europe.

THE TRAVELLER
90% of travellers purchase at least one product at each stage of their trip and spend a total average of approximately 400 Euros on shopping. 39% of this budget is used for duty-free purchases.
Each one of them is attracted by 9 product categories but makes purchases in just 5 of them. The only categories of common interest are wines and spirits, confectionery and beauty products.
71% of travellers make purchases in the duty free to take souvenirs, even food ones, to friends.

THE BUSINESSMAN – THE SPENDTHRIFT CUSTOMER
They are mainly men and represent only a quarter of travel retail customers.
Business travellers aim 50% of the spent budget in duty-free shops. Given the short duration of their travels, they hardly have the opportunity to go to shops other than the ones in the airport and their purchasing experience in the duty-free shops is characterised by a certain amount of haste. Due to this, their selection of products is mainly based on the brand identity.

THE LEISURE TRAVELLER – THE CORE CUSTOMER
Leisure travellers make up three quarters of the travel retail market, even if they spend just half of what business travellers do. Having more time, the purchasing experience is not based only on the brand identity, but rather on a meticulous selection based on several variables, pricing being the first.

How to draw the attention of international key-buyers

The importance of value propositions and quality consultancy

As we know, the travel retail market is one of the most competitive ones in the world; you need to shove aside many competitors to conquer the right to showcase your products in the world airport retail spaces.

Playing a game on a game board as large as the entire world, and competing against leading world brands, is no easy task.

I will now unveil my strategy (don’t tell the rest of the world) to gain the attention of the world top buyers, who are reached every day by innumerable business propositions, maybe a little too similar to yours.

Travel Retail Operators – Examining the Top Players

Who managers the retail spaces of major airports worldwide?

Those embarking just now on the wonderful travel retail world will find all the necessary coordinates to interface themselves with the field operators in this article.

On the other hand, industry veterans, who are probably already familiar with these companies, will have the opportunity to learn important information on which to base their business strategy.

In other words, regardless of your degree of experience in this field, if you want to learn some information capable of seriously giving a boost to your business, continue reading this article. 

TFWA Exhibitions & Conferences

Why should travel retail experts attend these events?

As I often say to my team, travel retail is what I call a “people business”.

It doesn’t matter how many different products you got in your portfolio or how good your sales skills are, you can’t win the war alone! You will always need relationships and benchmarks.

I will never get tired of repeating that serious travel retail experts aiming to have success must focus on transferring value to a well-structured network built by and around them.