Turning Passengers into Customers
27 June, 2016
The travel retail sector is growing and brands are adapting their strategies to win customers in transit at airports or train stations.
“According to various studies, Europe, considered the engine of the travel retail sector, has seen a 3.6% growth in customers making purchases while on a trip. These figures are from the 2011-2015 period and the rate is set to grow to 6.7% by 2025,” say sources from fashion retailer, Mango. The company has 17 stores dedicated to the travel retail sector internationally, in addition to five in Barcelona and six in the rest of Spain. Launches at international airports are part of its expansion plan because, as company representatives tells us, these stores “reinforce the global brand concept and are a key place to project Mango to many different target publics at the same time.” This is also the case, albeit on a smaller scale, of Catalan homeware firm, La Mallorquina. Led by CEO Gabriel Jené, the second generation of the family at its helm, the company opened its first travel retail outlet when the T1 terminal opened at Barcelona airport in 2009. “It was our first experience of this type. Until then we had been a much-loved homeware brand aimed at people living in the neighbourhoods where we had a store. At the airport, however, we’re a showcase to the world. The store is a brand ambassador and the last contact the traveller has with the city,” explains the firm’s store coordinator, Maribel Fabos.
Ruth Vilagrasa, head of the commercial services division at Barcelona airport, confirms the growth of the travel retail sector and explains it as such: “Firstly, people have increasingly less time to go shopping and the waiting time at an airport is a great place to do so. Secondly, because the airport is the gateway to a city. Brands want to be there because passengers see them when they arrive. It’s a way of projecting themselves to the world”. La Mallorquina tells us that its internationalisation process, in the form of franchises, began thanks to its implementation at Barcelona airport.
However, the travel retail sector forces brands to adapt to customers who differ from their regular clientele. “It’s a completely different consumption time. They’ll peruse your offer in accordance with how long a wait they have. Their purchases are less about pleasure and more about utility, such as a dress they forgot to pack or a last-minute gift. They’re in a hurry and their decisions are conditioned by their trip,” says retail consultant Joan Elies. That’s why the organisation and features of stores designed to operate in the street do not meet the requirements of travel customers. “We’ve been on the local market for 97 years. We have vast experience; we know our customers and they know us. When we opened our travel retail store we took the same approach as we do to an on-street store,” recalls Maribel Fabos. However, they soon realised they were dealing with a very different target public. Specifically, one that wasn’t loyal, didn’t know the brand and was simply passing through the transport hub. “In fact, it’s not a customer, it’s a passenger you have to turn into a customer in a very short time,” Fabos says. La Mallorquina then decided to diversify its travel retail products to adjust them to the new public. “Above all, we thought about gift items. We’ve kept the quilts because they’re part of our identity but we’ve been expanding on items that customers can carry home easily and which don’t require planning.” In this regard, Vilagrasa says that travel retail customers aren’t there initially to buy, so the range has to be very attractive. “You have to get them into the store first and once there the process must be easy and convenient because the customer is pressed for time”. Following these guidelines, Fabos says that La Mallorquina’s furniture at the Barcelona airport store “isn’t designed to store products but display them, because the goal is to enable customers to be independent and not waste time asking questions”. Mango agrees, adding that pricing is also a key component to attracting itinerant customers. “Promotions and special offers are decisive to the buying decision. But so too are the podiums on which the products are presented, the counter and even the entrance to the outlet at the airport”. The Catalan multinational says, however, that in addition to elements specific to travel retail outlets, there are others that are common to all stores and very important to this public, too. “You have to ensure good product replenishment and to place best sellers in an attractive and functional way so that customers in a hurry can enjoy a satisfactory retail experience,” the firm’s sources say.
In the case of Barcelona airport, Vilagrasa feels the facility is well organised to boost sales offerings. “There is a plaza concentrating the commercial area, called the Shopping Center. In the middle is a 3,000 sq. metre duty free store surrounded by other important brands. That’s our heartland”. It’s important to mention that the configuration of the sales space at a facility like an airport must always find the right balance between the location of the retail offer and the requirements of good passenger flows in order to work well.
So who are these customers who are increasingly buying while they travel? La Mallorquina knows that the purchaser of most of their sales are outbound travellers, not inbound ones. “It’s a 90-10 ratio. In other words, 90% of our sales come from people leaving the city, while only 10% from people arriving,” says Fabos. Beyond the figures, the homeware firm says it has two core publics in this sector. “On the one hand, the trade fair and congress customers from companies based in European cities. They have a bit more purchasing power than holiday customers. They know us and drop in each time they are in town on business. On the other hand are the holiday travellers, particularly in July, August and September, with slightly less purchasing power”. Mango figures show that 80% of its travel retail customers at airports are foreigners. The firm speaks of two clear profiles. “Firstly, those who know the brand and are regular shoppers at our stores. They usually want basic items or a change of look and to travel more comfortably. The second are people at the airport because of a flight delay or on a stopover. They have more time and visit the store in a more relaxed fashion. Their goal is to discover our collection”.
Leaving aside the particularities of each brand, Vilagrasa says that Barcelona is seeing a rise in Asian shoppers, particularly Koreans; she also says that Asian and Indian customers are very important to the travel retail sector because they buy high-end goods. “We’re lucky to also have cruise tourism. These customers have a high purchasing power and their shopping is driving brand expansion,” Vilagrasa says.
Considering the international profile of the travel retail customer, Elies says “mastering languages is an essential skill the store personnel must have”. He says a general knowledge of the public’s country of origin is just as important. In this regard, Fabos says, “The personnel in our travel retail store must know at least English, Russian and Chinese. But above all they have to be able to make themselves understood quickly, know how to serve a Japanese customer, for example, and transmit confidence and friendliness”.