By Marco Passoni
As is often the case at this time of year, I find myself, alongside many others, looking to the future and the year behind us. As I do so, I often wonder: What now? How will our market and those who use it change in the year ahead? What should we do to make sure we are providing the best for our customers and partners?
A year ago, I wrote a blog entitled 7 New Year’s Resolutions for the Travel Retail Market. They included creating new spaces, setting better and clearer sustainability goals, working closer together, engaging shoppers better, moving past the Master Concession, taking action and banking on travel retail’s price advantage.
On reflection, I think travel retail has fallen short in many ways this year. Sustainability too often remains a conversation without actions, while price still struggles to be a conversation. The business model is still the same, but there is movement on collaboration and shopper engagement.
As I consider 2023, this are what I will take away
Many of our sustainability efforts are just greenwashing
The recent COP28 conference underlined the difference between talking and acting. People shook hands over a deal on paper which mentions fossil fuels but leaves gaping holes in its outlook for the future. Too much of sustainability is talk – it is all worthless until action follows.
AI is a gamechanger
While the metaverse has faltered until technology and brand capabilities catch up, AI has already made its mark and continues to do so. From helping with menial tasks which frees up staff to do more, to beginning to shape the way we shop and engage consumers, this technology will be a centrepiece of business for years to come.
The future is bigger than China
As travel and international shopping from China have faltered thanks to administrative backlogs, capacity limits and confidence concerns, new markets have emerged which offer vast, untapped potential. From India to Vietnam, the world is changing and new shoppers are entering the market – each bringing new demands and perspectives to be considered.
Luxury’s potential remains untapped in travel retail
The recent openings from brands such as Moncler, DG and the first travel retail store from Golden Goose, showcase the power of luxury and the capacity of this market to deliver something truly special in a travel environment.
Many of us still do not understand Gen Z
From their social media mastery to their capacity to engage or discard brands on a simple issue, the impact of Gen Z on both the luxury and travel retail markets cannot be understated – and it demonstrates that many of us do not understand how to speak to this powerhouse generation. Maybe it is time for us to let some younger voices be allowed to lead the way; to engage our shoppers, we must understand them.
The Tourist Tax is hurting the UK
I cannot believe that, as I write this, the Tourist Tax in the UK remains in place. This ridiculous decision is hurting the UK and ruining its international standing as a centre of retail. It has cost the Treasury and businesses billions of pounds, and it is time that it was gone.
Take a direct approach
Recent openings by leading luxury brands such as Louis Vuitton, Moncler and DG, have showcased the incredible spaces which can be created when brands operate their stores directly in a travel retail setting. With unparalleled ability to create the ultimate piece of their brand universe and create an authentic sales experience, we must see more of this in the year ahead.
The market is merging
Collaboration has really made its mark in 2023; from Dufry and Autogrill rebranding as Avolta, to Rolex’s acquisition of Bucherer, there have been unions all over the place this year, and I think that is for the best. Combining expertise and resources creates a better offer for consumers and improves our capacity to deliver excellence. Long may it continue.
People make the difference
Our Retail Academy 2.0 has demonstrated the power that people have on the shop floor in 2023. As ACI has shown, a 1% increase in shopper satisfaction leads to a 1.5% increase in revenue, and creating energised, engaged and confident teams is the secret to success in the modern market. But 2023 has also shown us the power of celebrity-owned brands, with famous faces leveraging their personal power to engage shoppers – in 2024, as technology continues to develop, we must remember that people count more than ever.
And we cannot ignore Price
It seems like repetition to highlight this again, but I cannot underline enough the importance of price in this market. Regardless of what we think, shoppers expect a price advantage in travel retail. It is a driver of purchase and a barrier when not delivered. We must put it at the heart of the conversation before it is too late.
Those are my thoughts for 2023, I would welcome yours, and I wish you all a happy holiday season and a successful 2024.
