INTERNATIONAL. Nestlé International Travel Retail (NITR) is partnering with The Moodie Davitt Report on a new monthly column that will examine how confectionery & fine food can become a US$10 billion travel retail category.
As reported, the confectionery house has pledged to help double total travel retail sales to US$10 billion in the next ten years (10 in 10), in partnership with retailers, airports and other brand owners. The strategy was revealed by NITR General Manager Stewart Dryburgh at major industry events and interviews in 2019.
As part of that vision the company outlined the key messages through a special Moodie Davitt Spotlight eZine in December.
Now we focus on how each of the nine core drivers can contribute to growing the category in a monthly column from this week, beginning with the vital element of ‘All Year Round Gifting’.
As reported previously, the NITR vision is to focus on consumer-centric, future-focused opportunities that will drive incremental growth in the category over the coming years. NITR (in partnership with m1nd-set) has identified three key purchase motivators, under the headings ‘Elevated Experiences’, ‘Deeper Connections’ and ‘Better for You’.
These in turn are broken down into individual reasons to buy, or key drivers (nine), which we will focus on in these columns.
‘Deeper Connections’ includes elements such as All Year Round Gifting, Share and Connect, Celebrate the Seasons and Uplifting Breaks. Examples of these are the rituals of gift-giving to surprise or delight; products for casual socialising with family or friends and using confectionery & fine food to mark key seasons in the calendar and moments in life.
‘Elevated Experiences’ includes elements such as Travel Souvenir, Give Me a Boost and Experience & Indulge, which between them can range from a gift that evokes the trip to products that prompt different senses through flavour, texture or packaging.
‘Better for You’ includes the drivers Healthy Snacks, Better Treats and Happy Parents-Happy Kids. These can range from products with the ‘win/win’ of treat/taste and health, plus items with taste, convenience or nutrition that are suitable for snacking on a journey. At the core of all of these solutions sits the focus on quality behind the final over-arching driver, ‘Perfect Condition’.
All Year Round Gifting
Gifting is a purchase driver for many travellers at airports and other travel retail locations and for an increasing number of them – particularly from Asia – gifting expensive products is “culturally binding”, says NITR.
Customer data has shown that the All Year Round Gifting driver represents a big opportunity, driving around 30% of category sales across core locations.
Travelling consumers often look for brands, products or formats not available in their local market and focus on craftsmanship, authenticity, unique concepts and stories. These features are important to all age groups and social classes, but particularly so for millennials.
Shopper requirements are that they must trust the product and/or packaging (preferably both), as the gift offers a strong impression of the donor. Perceived value is vital here, with many gifts boxed with ribbon or special wrapping.
Importantly, many products fall within this gifting driver and its pricing corridor is the widest of all of the nine drivers. Gifting can cover all price ranges from a small token of appreciation – perhaps a product such as Ferrero Rocher to more premium brands such as Lindt or Godiva which have a higher price/weight ratio.
Spend is motivated by the occasion, ranging from gifts for family to other loved ones to colleagues, alongside special occasions or even small gestures.
Direct and easy to understand communication is critical. Often, says the brand owner, travellers often cannot find what is on their list – or the points of differentiation are not strong enough when it comes to product packaging, ingredients or variants. Messages such as ‘I love you’ or ‘I missed you’ can also swing a purchase decision because it directly communicates a certain feeling from one person to the other.
Consumer purchasing motivations are mainly pre-planned but with some impulse/distress purchases, suggesting an incremental arrivals shopping opportunity. Finding these gifting items quickly is also crucial as trips are often short, meaning the shopper is time-limited.
Promotional mechanics are based around either increasing spend (price-off a larger sized product), multi-buys for those buying smaller, multiple gifts or encouraging experience and sampling among those that have not planned to purchase.
NITR noted the big opportunity for cross-promotion with other categories, notably wines & spirits, with confectionery & fine food often used as a smaller top-up to the main gift.
Also, many products within the All Year Round Gifting driver also have a secondary driver – usually Share and Connect or Travel Souvenir.