Retailers need to understand the new normal and adopt strategies to become more convenient, agile and hyper personalised, according to new report #SOTN18 (State of the Nation), authored by duty free and travel retail analysts at Counter Intelligence Retail (CiR).

In what CiR describes as its ‘most thought-provoking analysis of travel retail to date’ the firm has released an in-depth review of the duty free and travel retail business. The report begs the question: what does opportunity really look like in 2018 for both retailers and manufacturers?

The report focuses on key topics that are driving business strategy and category revenue; for example the scramble to digital, and beauty’s prominence, respectively.

To view a sample of the report click here.

‘Hyper-connected’ passengers are not new to the DF&TR landscape, but they will define it for years to come, insists the report: “2018 needs to see (duty free) retailers give credibility to the connected consumer and understand the new normal that now exists,” says CiR.

“The domestic shopper is increasingly buying on impulse through sophisticated e-commerce channels. Duty free in-store activations must be convenient, agile, hyper-personalised, reward loyalty and complete the journey from online to offline – rather than the inverse.”

SIMPLIFY THE JOURNEY

#SOTN18 also suggests that DF&TR stakeholders need to adopt technology to simplify the passenger journey.

“However, operators and brands should be aware that technology is intended to simplify the user experience and remove barriers to purchase, not the other way around,” says Garry Stasiulevicuis, Founder and President of CiR.

“This simplification should positively impact dwell times and drive incremental, and experiential purchasing.”

According to #SOTN18, e-commerce shopping and cashless payments are particular trends for both Indians and Chinese, which markets are also the fastest growing in terms of air traffic.

BEAUTY REIGNS SUPREME

Segmenting the industry by core DF&TR categories, it is clear that the channel has polarised to become highly beauty dependent, says CiR. “This partly reflects the greater influence of the Asia Pacific market where beauty has particular strength.

“Comparing all other categories’ contribution to growth over the 2015-2017 period, beauty continues to lead from the front contributing +$4.7bn. This is more than twice the sum of all other categories combined over the two-year period, which is an astonishing feat.”

Looking ahead, the #SOTN18 report suggests appealing to inclusivity to better engage consumers for continued growth.

The report says: “Merchandising must consider its role within a category that has seen lines blurred between gender, ethnicity and cultural roles.

“Consumer-led innovation has defined the category this past year and brands like L’Oréal are safeguarding themselves from future disruptors. This will drive the category forward whilst passing cost-savings to the consumer…but it can’t come at a risk to ingenuity and originality.”