Data and disruptive tech reshape commercial opportunity for FAWJ

By Trbusiness Editor |

Coty Travel Retail Asia Pacific’s Boss cross-category pop-up store at Changi
(14 May to 23 June 2024) showcases fragrance, fashion and eyewear.

The inevitable creep of digitalisation is entering the travel retail bloodstream with transformation and innovation defining strategic focus across categories. Claire Malcolm speaks to key players in the fashion, accessories, watches and jewellery (FAWJ) space about how the shift from analog to digital is shaping the future.

Today’s increasingly digitised consumer expects convenience, choice and immediacy at every touchpoint along the travel retail value chain.

No longer able to rely on a captive audience ecosystem that has historically traded on in situ activations, experiences and engagement, the industry is now looking to integrate traditional channels with futuristic innovation to engage its audience beyond a traditionally physical retail setting.

Humphrey Ho, CEO of independent digital agency Hylink Group is unequivocal on the rationale for adoption but acknowledges the uniqueness of the travel retail environment.

“Digital is the core of decision making for those born after the 1990s. At the airport, however, unless it’s a pre-ordered purchase, digital takes a backseat as displays, counters, experiences, and GWPs make the final push.”

Digital influence

Speaking earlier this year at the GATE Future 2024 conference, Gebr. Heinemann Director Sales Experience and Excellence, Sören Borch, noted that while retailers are ready to implement new technologies and digitise processes, “we also [had] the experience that travellers need assistance in understanding new technologies installed in shops; and many are especially looking for the personal exchange with our staff. Therefore, for us it is physically first – but always digitally influenced.” 

In Q4 2023, the retailer launched its future-forward digital water and environment themed Experience Space within the main duty free store at Copenhagen Airport which includes, among other category offerings, Danish sunglasses brands MessyWeekend and James Ay.

Gebr.Heinemann’s Experience Space in the Tax Free store at Copenhagen Airport utilises lift and learn technology, interactive digital screens and a digital floor, as well as immersive visual and sound elements.

Furthermore, Gharage (Heinemann’s knowledge and vision hub) is well plugged into innovations and new technologies that would benefit travellers in the travel retail environment, launching, among other ventures, the Duffle app, a quick delivery platform for airport retail aimed at younger, more digitally driven shoppers.

The ‘always on’ traveller

Janice Smith, Global Sales Director for accessories, jewellery and beauty brand distributor YV Global believes today’s ‘always on’ traveller is ripe for pre-travel digital engagement, in particular travel exclusive products or those offering significant savings versus the domestic market.

“In Q2 2023, 28% of global Gen Z shoppers made online jewellery and accessories purchases according to Statista.com research. This shows just how much time they spend online looking at these categories,” she remarked.

Lacoste boutique art Hana International Airport.

Thomas Kaneko Henningsen, Partner at travel retail business development agency Blueprint, is enthused by the unlimited prospects that digital integration holds, anchored by the airport-operator-brand trinity alliance: “At Oslo Airport, Travel Retail Norway excels at live shopping where in-store sales staff interact directly with travellers, presenting and debating different products using digital tools,” he said.

“Another example is Qatar Duty Free, Hamad International Airport and Qatar Airlines, alongside their brand partners, who unite in terms of promoting novelty experiences via social media. It is fascinating
to watch how this trinity collaboration effectively leverages digitalisation.”

Unlocking the value of data

Data acquisition and management is a cornerstone of the digital journey. Ho is adamant that FAWJ brands and retailers are not using data to their advantage to better tailor the consumer offering.

“With the relatively new establishment of travel retail consumer marketing divisions in FAWJ, many lessons can be learned from their cosmetic, beauty and fragrance counterparts, particularly considering threats such as a general lack of brand loyalty across the category,” he said.

In already digitally mature markets like China, Japan and Korea, things are far more advanced and mostly in the domestic field, says Lacoste’s Erin Willis.

An omni-channel approach that leverages new technologies, such as artificial intelligence (AI), to reach travellers across various touchpoints throughout their journey is crucial, according to Aire Kraas of Marine City Duty Free. “Personalisation using data is key to providing relevant promotions and product recommendations and AI can even curate personalised gift sets while AI-powered chatbots provide 24/7 customer support. 

Data sharing challenges 

Data sharing is a thorny topic.

The latest Lagardère Travel Retail Travel Experience Voices survey (May 2024) revealed that airports and brands face ongoing challenges in the implementation of data-sharing models across the industry, with issues like GDPR and compliance flagged as major concerns. 

 Alex Wilson, Retail & Ecommerce Director for Samsonite Group UK and Brand Director, Tumi UK weighs in, saying: “We are keen to use any data our partners can give us so that we can learn the idiosyncrasies of the travel retail customer versus the high street customer, and tailor the ranges accordingly.” 

Evaluating the digitalisation opportunity 

The big question is whether digitalisation is making the category more valuable to operators by driving conversion. Said Wilson: “Digitalisation is influencing the channel for the better, however it will take time for disruptive technologies to become more mainstream, affordable and easier to understand to encourage brand adoption.”

The Shilla Duty Free has explored the power of ‘K-Metaverse’ technology to enhance its duty free services at a number of airports.

Lacoste’s Lillis leans into the importance of the travel retail trinity, and also sees digital gains in APAC. “Particularly in Korea we see strong business from digitally driven sales, pre-order and collect at airport. From the engagement side, travel retail is making progress in campaign management but the impact on customer retention is still hard to measure.” 

In the coming years she notes that fully embracing digital retail is contingent on a collaborative, collective stakeholder mindset. “The tech is fully ready, people have the knowledge inside and outside of the industry, and the customer is demanding digital services and solutions – the only thing that remains is a mindset shift by existing players.” 

This feature first appeared in the TRBusiness June/July 2024 issue.

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