Electronics: Retailers ‘don’t understand’ category’s ‘complexities and needs’

By Kristiane Sherry |

TFWA electronics panel

The TFWA electronics panel comprised (clockwise from top left): Michele Miranda, TFWA; Sam Gerber from WorldConnect; Jean-Pierre Bombet from Be Relax; Peter Newbould from InMotion; David Sternlight from Cabeau; and TRBusiness’ Luke Barras-Hill.

Most airport retailers “do not understand the complexities and needs” of tech and electronics, Sam Gerber, Co-founder and CEO of Skross parent WorldConnect AG, has said.

Speaking at the TFWA 365 Electronics & Travel Accessories in Travel Retail webinar on 6 December, Gerber added that other categories received more investment as a result. 

The webinar formed part of an ongoing series chaired by Michele Miranda, TFWA Conference Manager. TRBusiness’s Editorial Director Luke Barras-Hill moderated the morning session. 

“People still think that technology is not important or is not relevant,” Gerber told webinar delegates. “Well, every single seat in a waiting area has a charger that’s ready to charge your phone, your laptops, your iPads. 

“As such, we have another challenge; I call this the tech savviness of travel retail operators. Travel retail operators today are definitely more focused on cosmetics, perfumes, alcohol, spirits and tobacco. So, these are the market makers, I understand. 

“However, most travel retail operators do not understand the complexity and the needs of tech.”

He added: “I wrote down once that technology should help to make travel look good, or at least look better. That could be [with] a pillow, a charger…. So make sure that these products appeal to a larger audience. And also encourage the operators to introduce technology in general travel retail, because I buy a tech product more often than a bottle of whisky personally.”

Gerber’s presentation followed an address from Peter Newbould, Managing Director & SVP InMotion Stores, Marshall Retail Group. He also used his presentation to advocate for the importance of the electronics and travel accessories category.

Newbould opened with a question: what is your most intimate relationship? “It is your mobile phone,” he stressed. 

“Technology is now something which facilitates and enables all of our lives all the time. And I would say that for travel it’s probably even more true, right? So consumers are engaging with technology all the way through their journey from the moment or probably even from the moment they get inspired as to where to go next.” He cited the use of airport wifi, loyalty programmes, e-tickets, in-flight shopping, and even Uber.

A new InMotion electronics store at Stockholm Arlanda.

A new InMotion electronics store at Stockholm Arlanda.

“The need to keep your devices powered up, the need to continue to stay connected, has just never been greater,” Newbould continued.  “I think that needs to inform us in terms of how we think about accessories and consumables in the tech and travel accessories categories. 

Technology accessories, travel accessories are, I would say, as an essential part of an airport journey, as essential as bottled water.”

He called for consumable tech and travel products to be merchandised in as many airport locations as possible, especially as demographics shift. 

“Younger consumers don’t have the same kind of hang ups and apprehensions as older consumers have,” he detailed. “They’re not worried about needing a qualified specialist to explain to them exactly which cable they need to power their phone.” As such the category has become for everyone. “I think we need to be thinking about the category somewhat differently to specialist, male-orientated, boutiques, like the kind that InMotion traditionally has been.” 

Electronics sales and margin ‘potential’

Newbould set the tone in calling for a greater focus on electronics and travel accessories. “Travel comfort products need to be in as many locations in an airport as food and beverage consumables,” he stated.

“They are essential product categories, and, from an overall value perspective, probably offer the airport retail community some quite considerable upsides in terms of sales and margin potential if we can really make sure that the distribution is as wide and focused.”

This is especially urgent when the changing purchasing habits of Gen Z and millennial consumers are considered. “Younger consumers are less interested in traditional duty free categories than older consumers,” Newbould continued. “In particular, $250 bottles or spirits are appealing a lot less to a younger demographic that just drinks less alcohol. And I think done right, tech and travel accessories could start to fill some of that gap.”

A “barrier” to category growth is the rent structure model that persists for retailers, he said. “Relevant lower-margin hardware categories are very, very underrepresented in airports, relative to the potential.” He referenced smart devices, smart tablets, smartwatches phones, and also gaming. 

InMotion is investing in wellbeing tech

InMotion is investing in wellbeing tech

“Gaming is absolutely something that is a travel-relevant product category barely represented in airports at all. And it’s because the margins are lower than the rents.” Beauty and wellbeing tech is another “very relevant” area of opportunity, he added.

Newbould also touched on the potential for ‘showrooming’, should rent models be overhauled. 

“There’s a big opportunity for showrooming as opposed to necessarily selling and transacting really innovative tech products, whether it’s robotics, high-end coffee machines, latest generation gaming,” he detailed. “Airports have incredible footfall of very, very switched-on consumers who are absolutely the kind of the right demographic for these categories.”

The challenge is not recognising the benefit in having products delivered, or bolstering the experience element. “There’s a value in that. But I think within our current commercial structures, we don’t really have a way of realising it in airports,” he added.

‘Not just for the nerds’

WorldConnect’s Gerber followed, stressing that “tech is everywhere”. “Technology is not just for nerds. I think that’s it’s literally for everybody,” he opened. 

He outlined that Skross adapters were considered the “army knife for travellers” and acted as “the interface between your device and any kind of wall socket in the world”. Last year, the brand sold over three million units.

Gerber tackled the concept of “perishable” tech. He argued that an electronics product’s lifespan was not cut short by advances in technology.

“It’s more driven by trends, in terms of what is cool,” he stressed. “Is it a new headphone, is it a new wireless headphone, that new power bank technology? The technology cycle I would say runs about six months when it comes to charging.”

He then detailed that retailers and operators “underestimate” the electronics and travel accessories category. 

“At the moment, travel retailers and operators underestimate the real potential of tech. That leads the to the fact that they will allocate lesser space to this category, even though there’s a huge and higher relevance for a younger generation,” Gerber stated. 

World Connect Skross Cannes Travel Retail Awards

Skross offers an array of charging devices – and won a Travel Retail Award for its work.

He also discussed the relevance of sustainability to the sector. “I’d like to put up an equation that says sustainability equals quality,” he mused. “Quality is not just using recycled paper, not just to have less packaging. It is literally everything in the in the operation chain.”

For him, a sustainable brand needs to eliminate waste at every stage of the supply chain, including in shipping and logistics. “I had to smile a couple of times when I heard that some people say okay, we have a new ‘eco-friendly product’, which has flown in a half-container by air in order to be available,” he said with sarcasm. 

A case study for Skross is the removal of packaging altogether. “It makes it easy to refill,” Gerber explained. “We have about four, five or six times the amount of inventory on the shelf. We not only saved a lot of packaging, of course, but we also saved a lot of energy and a lot of time in the shop for people to implement the range.”

Potential for beauty tech electronics

Next to speak was Jean-Pierre Bombet from Be Relax. The company not only operates in-airport spa treatments, but has its own range of beauty tech devices, too. The brand is present in 45 markets.

“We’ve seen a completely new customer, which is less interested in traditional travel accessories, but much more into things which are completely related to his own well being,” Bombet opened. 

A Be Relax beauty device

A Be Relax electronic beauty device

“There is developing demand for new products to take away on the fly, or to use at home. But completely for self-care,” he detailed. “That is completely the result of the pandemic.”

He explained that from a split of seeing 80% women in the airport spas, men now account for around 50% of his customers. 

“What is our adaptation strategy?” Bombet asked. “Number one is we are listening to our valuable customers.” This includes via surveys and polls, and through social media listening.

“Number two, we are adapting to the different regions and watching out for the local trends. The keyword is personalisation.” A third part is the team travelling themselves to observe what’s happening. Expansion is mostly coming from Asia and the US, he added. 

Are customers ready?

David Sternlight then addressed the webinar audience as the final speaker, lending his travel accessories perspective to the conversation. 

He opened by providing an update on Cabeau’s partnership with Clean Hub to become plastic neutral, as outlined at the 2023 TR Consumer Forum. Sustainability is at the heart of the Cabeau philosophy. 

“I think the trick [to growth] really is in serving consumers, showing them some of the products that we’re thinking of and getting their feedback,” Sternlight said. “By the time we do release [a product] into the market, there’s very little risk that it won’t do well.”

He said this was important for maintaining retailer relationships. “This is really important because our reputation is on the line. We need to make sure that we don’t put out into the market anything that will hurt our retailers.”

Sternlight added that a challenge can sometimes be operating ahead of trends. “We have come out with some extraordinarily innovative products in the past and learned our lesson the hard way that sometimes people are not ready for it,” he explained. 

Cabeau neck pillows are renowned for their sustainability and comfort.

Cabeau neck pillows are renowned for their sustainability and comfort.

“Right now, we’re operating from the perspective that it’s going to be challenging to operate in this blue ocean, coming out with things that are so unbelievably innovative, very cool. But how are we going to be able to capitalise that for both ourselves, our distributors and our travel retail partners, in a way that’s going to be financially successful?”

He added his voice to the earlier speakers calling for a greater focus and understanding for the electronics and travel accessories category. 

“When it comes to the big categories, there is that hand holding experience, perfume, for instance. I think [this category] becomes a lot more challenging, because simply the ticket prices for things like travel accessories are significantly lower. You’re not going to get as much one-on-one treatment.”

He concluded on a sobering note: “There’s so many challenges right now in retail, with the rising cost of employment. We all want to increase our bottom-line margin.”

According to a 2022 report from Allied Market Research, the global travel accessories market was worth $48.2 billion in 2021 and is projected to grow at a CAGR of +6.4% from 2022-2031 to reach $95.7 billion.

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