Talking a different shopper language: the American millennial in travel retail

USA. The approach of Millennial travellers to shopping in duty free was outlined by new research from Switzerland-based travel retail research consultancy m1nd-set.

In a joint presentation by m1nd-set CEO & Co-Owner Peter Mohn and Project Manager Anna Marchesini at the Summit of the Americas in Orlando, some key differences between American Millennials and older generations emerged.

Double act: m1nd-set’s Peter Mohn and Anna Marchesini take a deep dive into American traveller purchasing behaviour.

Breaking down the three groups – Millennials (18-35s), Middle-aged (36-55s) and Seniors (56+) – Marchesini set out some basic variations in identity and social terms, claiming that Millennials “talk a different language”.

Higher conversion rates are being seen among older segments than Millennials. But they are more observant when it comes to touch points about duty free products prior to getting to the store (below). [Click either image to enlarge.]

When to comes to duty free shopping, there are stark variations. While millennials offer high footfall (38%) their conversion rate is low in relative terms at 44%. This compares with 33% footfall and 52% conversion for the middle-aged, and 26% and 52% for seniors. This means that travel retailers are not doing a good job at convincing millennials to buy.

In fact m1nd-set said that spending by millennials was the lowest among the age groups at US$103 versus US$130 for the middle-aged and US$111 for seniors (also partly a reflection of the availability of disposable income).

Internet is the key

Around 20% of millennials notice touch points about duty free products before arriving at stores. This is against 15% and 11% respectively for older travellers. Furthermore 82% of these younger travellers will go online to do their research compared with 77% of the middle-aged and 71% of seniors.

The m1nd-set research also showed that while internet usage was similar across all age groups (66% to 70%) only 18% of seniors used it while in duty free stores compared to 37% of millennials.

Mohn and Marchesini concluded that pre-trip communication was not enough for millennials. Compelling in-store elements and experiential retail would be needed to drive up conversion from 44%. Meanwhile for the older segments it was the other way around: retailers and brand needed to provide pre-trip engagement to give these travellers a reason to go into duty free shops.

Growth to moderate in 2019

In the session, m1nd-set also gave delegates an overview – and breakdown – of travel trends in the Americas. Last year international traffic grew by 5.6% to 479 million passengers with growth this year expected to slow slightly to 3.0%.

International traffic will moderate this year.
Canadian airports led traffic growth in the Americas in 2018.

By region the strongest growth came from South America (8.2%) followed by the much bigger market of North America (6.2%) – through all regions will see growth slip this year.

In terms of airports, the best traffic growth in 2018 was in Canada. Vancouver led with 18.4% followed by Toronto (8.5%). Miami and Buenos Aires were equal third at 8.3%. Among the top 15 airports five saw declines in traffic: Los Angeles (-1.9%), Panama City (-1.7%), São Paulo-Guarulhos (-0.7%), Cancún (-0.4%) and Montreal (-0.2%).

These were just some of the finding from the detailed m1nd-set presentation.

For more on this and other sessions at the Summit of the America’s click here for our live feed and scroll down.

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