The current importance of Travel Retail and “travel customers”

“Airports have become in the new shopping centres for retailers, but they need to know how to make use of this channel”

Travel retail has become essential to the development and expansion of numerous businesses, particularly in sectors like luxury, fashion and health&beauty. In fact, it is estimated that this channel will be worth over 80 billion dollars worldwide by 2020.

The democratisation of travel and its resulting globalisation are key factors for the travel retail industry. The borders between countries are disappearing and a travel movement for both business and pleasure has begun.

The sector is booming and is one in which HMY has enormous expertise, thanks to a commitment made long ago and steered by Pedro Sola, now Sales and New Business Development Manager, who, after an almost 20-year career in the sector was able to identify opportunities in a constantly growing industry.

As he says, “in those days I was working on implementing shopping centres around the world and I realised that travel retail would eventually evolve into small shopping centres in places like airports, train stations, cruise ships, duty free shops, in short, border shops.”  This was clearly an opportunity for HMY to grow, and one which the company did not hesitate to grasp, and which underpins its current expertise.

Understanding 21st century Travel Retail and its peculiarities

These days, travel retail has ceased to be a distribution channel and has become a sector in itself, which encompasses a broad range of products to cover travellers’ requirements, these being peculiar consumers since their primary objective is not shopping. According to Claire Hutchinson Global Account Director at HMY “It is precisely this peculiarity that makes it necessary to understand these and all possible techniques to attract their attention very well. And at HMY, with our long track record, we have both solutions to create attractive spaces and a thorough understanding of each type of customer”.

The sector is most prevalent in airports, because there are more of these and they are larger and have more retail floor space. This is also the platform where passengers spend most time waiting, which has made it possible to develop a series of specifically designed circuits, called “go through”, which guide and entice passengers to walk through a sequence of sales areas displaying eye-catching, high-impact products and encouraging sales.

The main difference in this sector is that is not possible to make long-term forecasts like other industries can, nor can it achieve levels of growth that will prepare it to face the next two, four or six years with their respective needs. According to Pedro “the retail sector tends to programme medium to long term relationships for sales, manufacturing processes, raw materials, equipment, etc., whilst in travel retail, all transactions materialise within a maximum of three to six months, because sector operators work using a bidding system”.

This way of working requires great agility to ensure returns in the shortest possible time, since bidding processes function through temporary concessions. In addition, rather than space forecasts they make bidding forecasts, the results of which they do not know.

Given this scenario, what does HMY have to offer?

As well as the broad experience mentioned above, the company’s industrial area is well adapted to the sector’s current needs, and also to those of the travel retail area, as its plants and production system are an excellent fit for “just in time”.

Claire says that “in a field without recurring elements where each project is different from its predecessor and which is extremely demanding in terms of design, quality and materials, we offer the sector our enormous ability to adapt and to be of service, fulfilling customer needs and requirements”. This is possible thanks to a 360º outlook and structure, which consists of extremely strong engineering and project management departments, technical offices, suppliers, supply chain, logistics, assembly, etc… Which is the only way to supply 2,000-3,000 m2 airports in record time.

At the same time, we live in the digital area, and to make any point of sale competitive HMY Retail Tech supplies all types of technological solutions which, coupled with its other services, enable consumers to access omnichannel experiences through travel retail, too.

What’s more, according to Claire “in any case, we must never forget three essential keys to connecting with travel customers: fashionable or new products, reasonable pricing (or special offers) and product visibility”.

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