How is Melbourne and Victoria state coping with the changing face of Australian tourism? Peta Tomlinson reports. 

For the travel retail industry, the rise of the Asian passenger represents its biggest global opportunity, but that opportunity comes with a notice – treat this market with the respect it deserves and, most of all, give the travelling Asian consumers 

the shopping experience they deserve.

The key to travel retail success remains the same as that for any operator in any retail channel in the world: understand your consumer.

Respecting the consumer begins with ensuring that you have a thorough understanding of them, their behaviour and their needs. Unfortunately, all too often some operators in the travel retail industry cling to the headlines of Asian traffic growth as the whole solution, and not as simply the opening of a door to the real opportunity.

At LS travel retail, we have worked hard for many years developing our insight into the needs of the Asian travelling consumer – and our first and most important finding is that there is no such thing as ‘one Asian consumer’.

This finding reflects the incredible diverse set of countries and cultures of this remarkable region. If you visit the local markets of Asia’s great cities such as Beijing, Delhi and Hong Kong, you will always find a unique offer and experience at each destination that leaves a different impression in travellers’ minds.

For thousands of years, these markets have met their customers’ needs and, in creating retail offers at airports across the region, we aim to meet the modern passengers’ needs by tailoring the retail offer to the unique needs of the Asian shopper and the unique setting that each airport provides.

In the same way that individual travellers take away specific memories of the different cities and markets they visit, so too will they remember their airport shopping experience.

Travellers are often intrigued by their holiday destinations and will have accumulated a vast amount of information, time and effort in familiarising themselves with their destination and ensuring their activities are a fit to their lifestyle.

Asian travellers, a busier and world-weary bunch, are often committed to creating their idea of the ‘perfect’ vacation. Within this, shopping for personal use and gifting are strong elements, especially in the souvenir category as one of the ‘must-dos’ to re-affirm their ‘been-there-done-that’ attitude.

However, when targeting the luxury shopper in particular, we must keep in mind that their retail experiences may extend from those frantic city markets to some of the world’s most luxurious and sophisticated modern retail destinations.

This mix of experiences shape their expectations and we must never forget that the traveller, although ‘confined’ to the airport lounge for a number of hours, is never a captive audience – not least in that mobile technology gives them many options for using their dwell time.

Across our global retail operations at LS travel retail, we have not only benefitted from increases in traffic but also managed to achieve significant real term increases in sales levels at every new airport contract we have won.

We do this through a holistic approach that begins by building the shopping experience on a platform of global expertise and local insight – we understand our target shopper in the region.

What do we know about them? Well, although there is no such thing as ‘one Asian shopper’, we can identify common patterns of shopper behaviour and their needs that we then integrate into the design of the retail experience.

For example:

• Throughout an average trip involving multiple locations, Asian travellers allocate 44% of their total shopping spend to duty free purchases
• Their favourite product categories are technology products, perfumes and cosmetics, alcohol, clothing and souvenirs – accounting for approximately 2/3 of total trip spending
• Very few Asian travellers (1%) totally reject duty free when they travel and they usually allocate approximately 30 minutes of their free time in the airport (average 90 minutes) to shop in duty free
• Most (approximately two-thirds) of Asian travellers say that they enjoy browsing duty free when they travel. They take their time to shop, speak to staff and find out what’s new

These patterns indicate the scale of the sales opportunity, but they don’t tell us the whole story. For example, retailers face the challenge that despite strong participation in duty free shopping, there is an element of ‘going through the motions’ for some travellers. As such, generating foot traffic through the stores doesn’t automatically equate to increased sales.

However, this is where the true skills of the retailer can be exploited, as many travellers need to be inspired or presented with something motivating – a shopping experience that engages them and persuades them to buy.

To achieve real growth, travel retail must reach beyond the easy low-hanging fruit and reach higher by creating a stronger experience.

By understanding the passenger profile at each location and creating clear profiles of target shoppers, the retailer can tailor the retail offer to the needs of the target audience.

To reach our targeted travellers with an effective experience requires a partnership between retailers, landlords and suppliers to develop shared strategies that deliver the shopper’s needs and maximise the opportunity.

This shared or ‘trinity-style’ approach works and we have enjoyed significant new successes with our partners over the past year.

Among our most recent openings is So Chocolate at Singapore Changi, where the close support of brand partners such as Kraft and Mars helped create stunning in-store themed character displays designed to engage, entertain and convert the browsers drawn into the store by the theatre.

They included a Toblerone Ski Lift and a 2.7-metre high M&M’s character at the store entrance. As a result, the store not only provides a new experience in confectionery but also strongly supports the airport’s emphasis on innovative and positively surprising experiences for the shopper as part of the renowned ‘Changi Experience’.

Similarly, we also recently developed a new approach to fashion retailing at Singapore with The Fashion Gallery, created specifically for our target audience among Asian travellers.

The stylish and elegant store comprises of 17 renowned international brands showcasing the latest collections from jewelleries to ready to wear apparels.

Among the innovations in the store encouraging shoppers to browse for potential purchases was a specially installed Facebook ‘magic mirror’, in which they could capture a stylish image of themselves, send it directly to their Facebook page, and share it with friends around the world.

The final essential element of a great retail experience is the quality of service. Asian shoppers have high expectations of service quality so staff interaction is critical to ensuring conversion and increasing spend per passenger.

At LS travel retail, we believe that we invest far more strongly than almost any other retailer in service quality, through our own ‘OSCAR’ ISO 9001 certified training programme.

We believe that it brings added service solutions through intercultural coaching, tailoring the sales approach to the different cultures and evaluating service standards to ensure that we exceed
the shopper’s expectations.

This certainly works. For example, the Pandora jewellery store at Changi Airport (Terminal 1) was recently presented with a ‘Let’s Smile’ award by Changi Airport Group (CAG) for customer service satisfaction.

Similarly, staff at Relay were recognised at the Hong Kong International Airport (HKIA) Customer Excellence Awards 2010/11, with team and individual awards for delivering exceptional customer service.

Relay was also presented with an Outstanding Quality Tourism Services (QTS) Award 2011, recognition for accredited merchants who have sustained outstanding performance in the annual QTS scheme assessment undertaken by Hong Kong Productivity Council, the professional consultant commissioned by the Hong Kong Tourism Board.

Long-term forecasts show that Asian travellers are the dynamos that will power spending not only in travel retail but also in domestic channels across the world. The scale and importance of their influence makes them the most appealing audience for almost every brand in the world, particularly for luxury labels in every category.

In travel retail, we have to demonstrate to Asian travellers that all their needs are being met within an innovative, exciting and satisfying shopping experience.

We can only achieve that if retailers, suppliers and airport landlords share a common strategy to make it a reality.

As they travel the world in ever-greater numbers, flying further and more frequently, Asian travellers will respond positively to those retail locations that demonstrate a true understanding of their needs.

By building the travel retail experience on the bedrock of consumer insight, we can not only deliver the best possible shopping experience for the traveller but also maximise the long-term revenue opportunity for retailers, brands and airports.

Asia-Pacific Airports 2011 Issue 2