Within retail there are many specialized sectors that cater to specific needs and serve particular circumstances. Given its current status and due to its growth, one of the most relevant sectors is, you guessed it, travel retail. To understand what it consists of and why it has so many possibilities, we have to analyze everything in a bit more detail.
What Is Travel Retail?
Travel retail is the retail activity that happens in commercial spaces at airports, ports, and train stations. Its target market is travellers who go through terminals and spend long wait times in these areas, whether during a layover or simply when they just pass through them.
Truth be told, retail spaces at airports and areas where travellers transit have always existed, but in the last few years up until today there are factors that have led travel retail to grow enormously. Based on established predictions and analyses, it’s expected to continue to grow in the future.
Why Is Travel Retail Growing So Much?
There are several factors that explain travel retail’s development, and we can summarize them in the following four key points:
1. There Are More and More Travellers
This is something that is mainly affected by the airline industry. In the last few decades we have seen an explosion of low cost companies, which has made air travel more popular, and in turn, this has led to an increasing number of travellers passing through airports around the world.
Additionally, economic growth in many countries has also influenced this scenario, in which people are more likely to travel through airports. Specifically, the growth of Asian economies must be highlighted, where there are millions of travellers who are on the go frequently, and they spend an increasing amount of time in commercial spaces at airports.
2.- Travellers Are More Inclined To Shop
Despite the fact that travellers go to the airport with a very specific objective in mind, which is to travel, shopping also forms part of their regular routine. This is because they are in a setting that’s much more relaxed and informal, where they aren’t thinking about their daily concerns. Instead they’re looking to disconnect and enjoy a day far from their everyday reality, which makes them worry less and shop more.
Also, the layout of stores and products is much more open and accessible than at shopping malls and stores on the street. This makes it possible to discover new brands and products at airports, ones that many customers had never approached before in urban spaces.
3.- Brands Have A Lot More Information About Their Customers
Being in a space with established timetables for flight departures and arrivals, as well as knowledge of destinations and points of origin, gives sellers specific data about their customers. It also enables them to analyze their purchases to know each traveler’s interests.
This also favors their ability to make predictions based on the traveler’s point of origin. It allows them to customize the display of products for sale and also rotate salespeople so they can serve customers in a more personal way, even in their own language, based on shoppers who arrive at specific times.
4.- More Visibility And Opening Up New Markets
Products displayed at travel retail spaces reach a much broader audience, as shoppers are more diverse, not only because of their geographic origins, but also in terms of their purchasing power.
This can serve as a way to test supply and demand, and at the same time, study the prospects of certain products in markets where they haven’t been released yet.
Travel Retail, A Sector Full of Possibilities
In conclusion, travel retail is a retail sector with a huge capacity in terms of growth. It’s also crucial for brands because it can increase market share, and can provide information when expanding to reach new audiences and markets.
At HMY we keep this growth in mind, and it’s why we apply our knowledge and our ability to innovate to this retail sector as well. There are multiple projects that we have worked on to set up new shops at airports, introducing retail furniture, digital signage, lighting elements, etc., so as to attract and impact users who are travelling.