By Marco Passoni
Travel is rebounding – finally. The latest figures we see show that passion for travel is so high that current “headwinds” (to borrow data speak) are doing little to slow the pace of recovery in much of the world.
Despite the increasing cost of living in many countries, the war in Ukraine and uncertainty over fuel prices, more and more people are getting on a plane. This means that more and more potential shoppers are passing through our stores. Their habits and reactions are drawing a map of the future for those of us in travel retail.
Data from the World Tourism Organisation tells us that international travel has jumped 324% in the first third of 2022 compared to 2021. This takes arrivals back to almost half of where they stood before the pandemic in 2019. What is more, that figure is set to grow to up to 80% in some regions by the end of the year. This is a far cry from the doom and gloom being spread by many early this year – in fact those harbringers of doom from early in the year are now conspicuous by their silence.
The World Tourism Organisation’s data shows that Europe and the Americas are leading the current recovery in cross-border international travel, while Asia Pacific – so often held up as if it is the only market that truly matters – will continue to lag behind.
This should leave no doubt in the mind of travel retail stakeholders that the world is much, much bigger than the Asian market. China and the rest of Asia Pacific will always be a key part of our industry, but we put too much focus on it at our peril.
The current recovery is a far cry from the doom and gloom being spread by many early this year – in fact those harbringers of doom are now conspicuous by their silence
Data does not lie and Europe and the Americas are the foundation on which our industry will build its growth in the coming months and, probably, years.
With this in mind, and with a view to the influx of additional returning travellers who are clearly on the horizon, there has never been a better time to ask what our returning shoppers really want. Our customers’ impression of our industry is what really counts. It does not really matter what we think about our industry, it is what they see – and want to see – when they walk through stores that makes the difference.
Insights recently released by m1nd-set have revealed that most of our key shopper segments share the same reason for shopping in travel retail. What is it? Value.
For many in the market, value and price have become dirty terms and ones which are shied away from. But they are the central pillars of our market and they are what shoppers think of when they talk about travel retail and duty free.
Middle aged shoppers still dominate our customer base, according the m1nd-set, but younger Gen Z and Millennials are taking a bigger and bigger share of the pot. All three of these groups put value and price at the top of their purchase drivers in one shape or form. Older shoppers, like those in the middle aged or Millennial segments, say they want “good value”, while Gen Z are more taken by a price advantage over the local market.
For many in the market, value and price have become dirty terms and ones which are shied away from. But they are the central pillars of our market and they are what shoppers look for
While these are delivered in different ways, with added value more likely to entice the older customers, these figures highlight that value and price must remain at the heart of all our plans – whether we like the idea or not.
There is more to consider. Shoppers are also considering convenience and brand loyalty when they decide what to buy, and that is true across the age groups.
Putting these ideals at the heart of our plans is only going to get more important as everything suggests that growth is only going to continue. Even Asia Pacific saw a 490% increase in traffic in June, compared to 2021, according to IATA, as markets finally began to reopen. Europe and the Americas sit at an also impressive +230%.
IATA’s Willie Walsh highlighted that people are “taking advantage of the freedom to travel”. They are also taking advantage of the opportunity to shop. But they know what they want and as they demonstrate that more and more, it is up to those of us in travel retail to recognise, pivot and react.