[UPDATED] Value for money impacts product appeal

By Andrew Pentol |

The extremely popular TRConnect webinar series returned today (5 November) with an exploration of exclusive consumer insights from Swiss company m1nd-set. The insights were used to determine the finalists and winners of the 2020 consumer-voted Travel Retail Awards.

Winners of this year’s Travel Retail Awards were announced in a live virtual ceremony hosted on 29 September, during this publication’s TRMarketplace digital networking forum, the first of its kind in the industry.

TRBusiness revealed the much-anticipated accolades based on inimitable feedback from a panel of consumer bloggers and vloggers and expert insight from thousands of international travellers independently sourced from m1nd-set’s unique database.

An overall appeal score was given to each product tested and in traditional Travel Retail Awards fashion, m1nd-set’s research accounted for 70% of the total with blogger and vlogger feedback comprising the remaining 30%.

Click here to view the m1nd-set slides from today’s webinar.

The TRBusiness awards ceremony, which at the time of writing had attracted a mammoth 7,279 YouTube views, included a virtual charity raffle. This raised $2,600 for global environmental organisation the Foundation for Environmental Education (FEE). Funds will support the LitterLess Campaign in New Delhi, India, a joint initiative launched by the Mars Wrigley Foundation and FEE.

PUTTING THE CONSUMER FIRST

Today’s Travel Retail Connect webinar, entitled ‘Putting the consumer first — Travel Retail Awards Consumer Insights’ lasted around one-and-a-half hours and started at 12:00 CET/5:00pm Singapore time [click below to watch a repeat of the webinar].

The session was co-moderated by TRBusiness Editorial Director Charlotte Turner and Michael Barrett, responsible for Events and Corporate Social Responsibility.

Clara Susset, Travel Retail Research Director, m1nd-set presented a detailed summary of the insights, which helped determine the finalists and winners of this year’s consumer-voted Travel Retail Awards.

Compiled from interviews with over 5,000 consumers who travel internationally, the insights revealed their likes and dislikes across 12 product categories.

Consumers also shared their views on eight airport and cruise award categories, including the first-ever Best Retail Environment Onboard a Cruise Ship and Best Green Initiative at an Airport awards, as voted by consumers.

The 2020 Travel Retail Awards was supported by a stellar line-up of sponsors.

Other speakers included Adrian Pittaway, Head of Retail at MSC Cruises, whose company won the first consumer-voted cruise retail award and Nikolett Huszák, Senior Retail Marketing Manager at Budapest International Airport, which claimed the inaugural consumer-voted airport green initiative prize.

The remainder of the speaker-line-up comprised Christine Keeling, Founder of Long Haul Spa, which triumphed in the Best Skincare, Haircare, Bath & Body Product category and Rachel Hawes, Marketing Director, Global Travel Retail, Distell. The latter was a finalist in the Best Spirits Product category.

Panellists provided their views on the importance of the consumer voice and revealed their reaction to the indispensable consumer feedback they received.

The return of the TRConnect webinar series attracted a strong speaker line-up.

At the start of the session, Turner urged stakeholders and consumers across the UK to back a TRBusiness campaign to reverse the government’s decision to axe airside tax free sales at UK airports on all goods aside from alcohol and tobacco.

Barrett then reminded everyone that the first virtual travel retail event dedicated solely to sustainability will run from 19-23 April 2021.

First to speak was Susset, who highlighted suitability to duty free shopping and quality of products as the categories which obtained the highest scores.

She said: “There were also some indicators which require more improvements as they generated the lowest overall scores. These were value for money and innovativeness/novelty.”

Despite obtaining lower scores than the other indicators, the value for money perception has increased each year since the awards started in 2018. “This is a very encouraging sign because we know from all the research we have conducted at m1nd-set that value for money is an important purchase driver and a key part of the decision-making process.”

Susset, who indicated that 33% of travel retail buyers mention value for money as the purchase driver, added: “Value for Money and uniqueness have the strongest positive impact on the general appeal of the products.”

33% of travel retail buyers mention value for money as the purchase driver.

Europeans tend to be the most demanding with the products tested, possibly revealing a lower engagement with the DF&TR channel and its products, according to m1nd-set.

This is reflected in their below average duty free footfall, conversion and purchase rates, which is backed by m1nd-set data indicating that 41% of European passengers visit duty free stores, versus 52% in Asia Pacific and 46% in the Middle East and Africa.

In addition, 23% of European passengers buy in duty free shops, versus 41% in Asia Pacific and 38% in African and the Middle East.

“We know travellers from the most mature markets are harder to convince and see this reflected in the below average duty free footfall, conversion and purchase rates.”

Millennials have particularly high expectations regarding uniqueness and innovativeness and tend to give lower scores on these two aspects versus older travellers.

Younger travellers are more likely to purchase in duty free if they believe products are unique.

Susset said: “This is a very important topic. We know from previous research that products which are truly unique to the travel retail channel will be key to attracting this demographic to the stores and making the channel an appealing option versus online and the domestic market.

M1nd-set’s Business Intelligence Service (B1s) indicates younger travellers are much likelier to purchase products they believe are unique in duty free.

As far as Chinese travellers are concerned — Chinese duty free buyers spend +73% versus global travellers — the apparent quality of products is strongly linked to their overall appeal.

“Providing guarantees of high quality and authenticity will go a long way in convincing these high-spenders.”

When it comes to product categories, three stand out in terms of average scores. These are make-up, spirits and fragrances.

Conversely, fashion and accessories, wine and children’s products obtain the lowest evaluations. “Different categories have different strengths, but we see make-up coming up across the board,” Susset acknowledged.

Wine products are among those which obtain the lowest evaluations.

Responding to a question from the audience on how the industry can improve uniqueness and innovation in the wine segment, Distell’s Hawes said the sector suffered from fragmentation. “There is so much choice in the airport environment which the consumer finds overwhelming. This is a challenge. There is a merit in trying to make things less confusing for consumers.”

She added: “Due to Covid-19, we are seeing a rationalisation of range by retailers across all categories including wine. It will be interesting to see if that helps consumers engage more with the segment at point of purchase.”

In terms of uniqueness, alcohol, make-up and electronics are the highest scoring. Make-up, perfumes and sunglasses top the charts in the quality segment.

Make-up is a top-scoring product category in several instances.

“For value for money, it is make-up, jewellery and watches and alcohol which are the highest scoring product categories. For innovativeness/novelty, we have alcohol, make-up and electronics again.”

In many instances, fashion and accessories is in the top three product categories requiring the most improvement.

Susset commented: “The weaknesses of each category can be very different. A category can perform quite well for uniqueness, but value for money may be challenging.”

She added: “We recommend brands to look in detail at the scores they obtained to really understand which demographics they should be making more of an effort to capture.

“They should also look at the scores to determine the different product features which appeal more or less to different types of travellers.”

The weaknesses of each category can be very different, according to m1nd-set.

On the new Best Green Initiative at an Airport award which was introduced for the first time this year, Susset said: “85% of initiatives tested obtained an average score of 8/10 or higher, clearly showing the enthusiasm of travellers for these concepts.

“Females, leisure travellers and millennials were the most positive in their ratings of the sustainable initiatives.”

The new Best Cruise Ship Retailer award was also positively received by most travellers.  “The retail environment on cruise ships tends to appeal most to senior travellers and males.

“This highlights the challenge to make shopping on cruises more compelling to millennials and females who are generally enthusiastic shoppers.”

Reacting to the m1nd-set insights and feedback received following its awards triumph, MSC’s Pittaway said: “This is the first time the cruise sector has been included in such a survey. I don’t think we have ever seen any consumer-driven feedback that actually has cruise lines in retail against one and another.”

He added: “The feedback shows service on cruise ships is very important. The overall mean score was high and obviously the feedback we obtained was high. It validates a lot of what we see as important and what we drive as being important.

“The information received from m1nd-set confirms a lot of what we think already, because we already survey all our guests whey they leave the ship anyway.”

The beauty area on MSC Grandiosa which resumed sailing on 16 August 2020.

Long Haul Spa’s Keeling said some of the feedback it received from its products was educational and surprising. “It was not what we were expecting to see at all in terms of the some of the geographies and demographics and things like that and has caused us to re-think some of the things we are doing and re-focus on different areas.

“The process has been fascinating. The research undertaken by m1nd-set has been of huge value from that perspective.”

Consumer feedback received by Distell has also proved extremely valuable, according to Hawes. “It has given us some clear insights in terms of what we should actually be dialling up as a company when things return to some level of normality. Some of these learnings will change some of our strategy.”

Distell’s previous actions were not tapping into what the consumer wanted or expected. “This data is really insightful. The more you use it, the more you will be able to hone your strategy in the retail environment within GTR.”

An Amarula campaign at Frankfurt International Airport in 2019.

Reflecting on Budapest Airport’s triumph in the inaugural consumer-voted airport green initiative category, Huszák commented: “The eco-friendly shopping bag was the award-winning idea from our side. It started maybe three years ago.

“They thought it would be a good initiative for the passengers and our partners because they are providing it to our shops. Also, we had the common agreement with the airlines that is could be used as a one-bag policy. This meant all passengers using the bag could take it on board free of charge.”

Speaking of sustainability, this is something Long Haul Spa has focused on from day one. Keeling said: “All ingredients are ethically sourced in New Zealand and the bottles are made in Byron Bay by a zero carbon footprint plastics company.

“Sustainability is a journey and has been part of what we are doing from the beginning. We have never looked at Covid as a pivot. Sustainability is an extension of what we have done.”

The importance of sustainability is not lost on Pittaway and MSC Cruises in general. It is no surprise, therefore, that sustainability has become much higher on the agenda. Pittaway said: “It is something in our industry we are very acutely aware of, have had to talk about strongly and really be present on.

“Last year, we launched our Ocean Cay island which was a completely sustainable retail environment on a desert island in the Bahamas. This included new products, a whole new range of styles and involved educating guests on things like coral friendly sun-care.”

Click below to view previous TRConnect webinars.

TRConnect: Cross Cultural Communications in the post-Covid context’

TRConnect: ‘Chinese travellers: The Much Anticipated Return’

TRConnect: ‘Engaging customers across all touch-points — Physical, Digital and Human — in a Post Covid-19 Context’

TRConnect: ‘Emerging Stronger in a Post-Covid World’

More to follow…

 

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