INTERNATIONAL. The Moodie Davitt Report, the world’s leading global travel retail information source, and leading independent agency Hylink Group have entered into a strategic content relationship aimed at delivering unparalleled depth and analysis to coverage of the Chinese traveller and China travel retail sectors at home and abroad. In a collaborative effort, The Moodie Davitt Report and Hylink will unveil a series of exclusive reports encompassing industry trends, profound insights, best practices, branding strategies and more. In this column, Hylink Group comments on the power of digital to power the travel retail industry.
Foot traffic to airports directly impacts travel retail, as increased volume of passengers means increased sales opportunities for travel retailers. It’s imperative to consider how to capitalise on this growing demand, as global passenger traffic is expected to reach 9.4 billion passengers, 94.2% of the 2019 levels.
According to Airports Council International, by the end of the year, the Asia Pacific region is expected to reach 2.9 billion passengers, or 87.3% of the 2019 level. With the uncertainty from both upside and downside factors, the region is expected to reach approximately 3.4 billion passengers, or 99.5% of the 2019 level, in 2024.
Many nuances come into play for retailers to be able to leverage the recovering volume of people that transit at airports. The relationship between retailers, brands, airports and airlines is a key aspect, as barriers within the industry include the cost of retail space, access to data, and an effective digital integration of all actors in the space.
According to the World Airport Digital Transformation Survey conducted by Airports Council International, six in ten airports worldwide has a dedicated innovation team to build and deploy digital solutions, and 55% of airports actively engage all functional teams in innovation and digital strategies.
Back in 2018, Kuala Lumpur International Airport took a significant step by announcing the development of an integrated big data platform. This initiative aimed to support operational efficiency and provide real-time information to both customers and airport operators, indicating a positive trend in the right direction.
Nonetheless, it is no longer adequate for companies to introduce isolated initiatives or engage in individual joint ventures. What is needed is a collaborative effort to establish a travel retail ecosystem that facilitates the exchange of data concerning passengers’ schedules, shopping preferences, and other pertinent insights, as highlighted by BCG in 2018. This shared information can then be harnessed to create an enticing shopping experience for passengers at every stage of their journey.
While numerous airports are continually announcing digitalisation measures to enhance the passenger experience, such as customer-centric approaches like contactless passenger experiences from parking to boarding, powered by self-service and biometrics technology, or the adoption of mobile technology like the HKG My Flight app, there remains a conspicuous gap in the integration of the retail experience within these systems.
Instead of drawing passengers toward duty free shopping, this digitisation seems to be pushing them away. Travellers now spend less time at the airport, treating their time there as a mere transaction before they board their flights.
In this framework, brands have pursued various approaches to attract consumers, such as expanding their product offerings to encompass a diverse and extensive range of products and embracing innovative promotional campaigns coupled with enticing price incentives.
They may also have exclusive stores for special products. Nonetheless, the restricted access to global data remains an impediment, hampering brands’ ability to effectively execute their strategies and reach the right consumers at the early stages of travel planning.
The challenge here lies in how airport digitisation can assist brands and retailers as they operate within these airport spaces, especially given the limited time passengers now spend before boarding their flights and exploring airport stores. In addition to providing support during travel, airports should consider the potential of providing data or platforms to brands and retailers, allowing them to connect with passengers before their actual travel day.
This proactive approach could enable brands to grab the consumer attention at an earlier stage in their journey, enticing them to plan a visit to airport retail spaces either before or after their flights. By offering omnichannel solutions that facilitate their decision-making process, the actors in the field can further enhance the attractiveness of the travel retail experience, pushing the industry to new heights.
*To kick off its groundbreaking partnership with The Moodie Davitt Report, Hylink Group Managing Partner Humphrey Ho will speak at The Trinity Forum in Hong Kong on 25 October to offer insights into the outlook of Millennial and Gen Z Chinese travellers, delving into their spending habits, purchasing power, and preferences. ✈
