COVID-19 or the Coronavirus is wreaking havoc around the world, but the travel retail industry’s current reaction has been to sit back at a time when our business needs our support more than ever.
The effects of Coronavirus on the travel retail industry should not for a minute be downplayed. On top of the human costs, which are tragic and equally must not be ignored, the sharp drop in traveller numbers is beginning to be felt around the world.
It is good to see airports and airport authorities putting swift measures in place to mitigate these challenges and we at TW.O & Partners applaud those efforts, but as the situation deepens there is another worrying trend developing, one which could mean life or death for our business.
To attempt to sit-out the storm created by Coronavirus is to ignore one of the key aspects of our market, namely that the money we invest today is to benefit the medium and long-term future of our business.
More and more of the brands and businesses I speak to in our sector are talking about freezing spend and projects until the situation has passed. This is, in my view, a dangerous, emotional and unreasonable approach to our industry at a time when it needs input and innovation rather than fear and withdrawal.
Make no mistake, to assume we can do nothing and wait for this storm to pass could mean then end for some of our business as we know it. But that need not be the case.
One of the strengths of duty free has always been its resilience. This market has faced adversity and challenges, even more so than domestic outlets, but research has shown that travel retail has the bricks and mortar stores which still hold an appeal for shoppers. To attempt to sit-out the storm created by Coronavirus is to ignore one of the key aspects of our market, namely that the money we invest today is to benefit the medium and long-term future of our business.
…the industry cannot hope to sit back, do nothing and bounce back once good times return. We will not.
Today’s plans are for tomorrow’s fulfilment and will not come into effect for at least a year. If we stop investment now, then if the situation has cleared in six months’ time we will be faced with a market with no active pipeline for innovation.
New figures from Global Data suggest that the Coronavirus situation will wipe out more than $8bn of duty free sales in the Asia Pacific market alone this year. The loss of almost a fifth of annual sales in our most powerful market is proof that the industry cannot hope to sit back, do nothing and bounce back once good times return. We will not.
A market which is not developing and planning is dead. But this time can and should be spent planning and developing our future offer. Travel retail is a fast-moving market which is teeming with great ideas. We can and should use the current situation to invest in and build for our future so that once shoppers return they are greeted by a vibrant and exciting marketplace, not one trying to pick itself up from the recent downturn.
To quote from Reuter Communications’ China Covid-19 Outbreak Situation Analysis and Recovery Planning report, which sums the situation up perfectly: “While now is not the time for active promotion, it is a time for active involvement.”
Many in travel retail and the luxury market have voiced their confidence that we will rebound strong once the opportunity arises, but if we stand still and hope this will pass unscathed then we risk that opportunity never arising.