In June, Gary Bowerman analysed the outlook for travel retail across Asia Pacific and beyond, as brands and retailers await the return of the region’s big spending travellers.
The Five Potential Indicators for the Future of Travel Retail commentary was commissioned by Zurich-based DKSH. It forms part of a series of 10 Asia-focused consumer, lifestyle and travel articles I will be producing throughout 2021.
Here’s the introductory section of the article:
“Experiences are more important than possessions.” This has become a mantra of Asia’s tourism industry as it seeks to understand how travel behaviors may evolve post-pandemic.
The underlying precept is that travelers may want to escape to nature, to experience freedom in serene landscapes rather than spend time shopping when travel bans are eventually lifted. Tourists radiating away from urban centers could dampen the much-hoped-for revival of travel retail spending.
Yet, predicting future trends in Asian travel is risky. Having been unable to fly beyond borders for 15 months and counting may mean that caution and safety remain paramount, at least initially. Alternatively, grounded travelers may take to the skies in large numbers as soon as the airport gates are opened.
But when travel does resume, will “revenge spend” travelers stimulate visitor economies once more? And how should businesses prepare? At the same time, has skyrocketing pandemic-era growth in eCommerce altered travel retail forever? If so, what new spending patterns could emerge?
Amid the current uncertainty, here are five factors for travel retail businesses to ponder:
1) Charting Domestic Travel Spending
Things to consider: Shifting consumer aspirations, domestic tourism patterns and purchasing triggers.
2) Watching China’s Hainan Island Experience
Things to consider: Duty-free hypermarkets, bespoke branded launches and huge volume sales.
3) Innovating in Travel Shopping
Things to consider: In-the-moment purchases, downtown duty free and ‘flights to nowhere.’
4) Making Travel Payments Seamless
Things to consider: Diversity of digital payments, e-currencies and gamified promotions.
5) Buying into the Travel Shopping Experience
Things to consider: Travel gift buying, ‘sense of place’ artisanal products and mementos inspired by local culture.