Travel-retail urged to follow passenger trends

Bill Lumley

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Non-traditional passenger trends must be followed to keep the interest of the travelling public, ARC delegates told

The challenges affecting inflight duty-free operations in the future were conveyed by Macquarie Airports (MAp) commercial director Doug Benham on the second day of the 2010 Airline Retail Conference, staged this week in London. The day took a closer look at inflight retail connectivity issues following presentations on the subject the previous day and began with an address on the future of travel-retail.

Among the trends that should be followed closely by the industry were demographic changes, Benham told delegates. “The importance of understanding the changes in our customer profile cannot be overestimated including ageing population, baby boomers, globalisation happening at a fast pace and increased leisure time. We need to know our evolving customer profile to react accordingly.”

Macro-economic developments were another key trend of which the travel-retail sector should not lose sight. “One of the key drivers of traffic growth is GDP, which is at best steady in developed countries, while we see marked growth in the economies of Brazil, Russia, India and China,” he said. “It is important to follow consumer behaviour trends including issues of health and well-being, social networks, customer control over products and prices, ethical issues and the increasing need for authenticity.”

Domestic retail trends are also relevant, Benham added. “We are seeing more entertainment in retail, connectivity with customers, brand destinations, specific interests retailing and much more. Travel trends will influence the future of travel-retail.

“Despite the current poor air passenger statistics, according to Airbus air traffic is still forecast to double over the next 15 years, and low-cost traffic is here to stay,” he said. “Our research shows low-cost airline passengers spend at least as much as other kinds of passengers.”

It was also important for the travel-retail industry to keep a close eye on the growth in mobile handheld technology and the demand for information, shops as communication centres, social venues, social interaction and the integration of product and store. “Lots of technological changes in a very short space of time are going to continue at a rapid pace. Shopping will become a socially connected activity. The industry will have to embrace this sharing of information. Shops will need to evolve to create experiences to drive sales both in-store and within social networks. The physical store will still provide the experience but there needs to be more dynamic use of space and a growing use of loyalty and repeat sales,” Benham said.

If travel-retail is to continue experiencing growth it needs to focus on a number of areas including the travel experience, he added. “There is a clear relationship between a relaxed passenger and passenger spend. At airports we need to make the journey experience as stress free as we can,” he concluded.

For a full report of the ARC2010 conference see the August edition of DFNI.