I have discussed it many times in this blog. The most critical information you can use in Travel Retail is passenger numbers. There are many variations of passenger numbers available out there but there is one set that will absolutely undermine any strategy that you develop and potentially kill it dead in its tracks.
A couple of years ago, I was inspired by a TV program to take up baking. I had always wanted to know how to make bread and was always told that it was ‘tricky’. So, one day, I went out and bought the ingredients and gave it a go. I am glad I did. The difference compared to a branded supermarket loaf is incredible. Most weekends I like to make bread to enjoy on a Sunday morning with a pot of tea and a paper (well… I say paper – more like a Topsy and Tim book with my son!).
Anyway, the ingredients are simple:
That is it. Mixed in the right combination and cooked at the right temperature for 25 minutes and you have a fresh loaf that you want to eat as soon as you can. Even I can manage that.
So what has a loaf of bread got to do with a Travel Retail Strategy? The reason this mixture works is that key ingredient – Yeast. Without it, you wouldn’t get your bread.
So… let’s consider changing Yeast for sawdust or algae? What would you have? Something very unpleasant!
The Strategy Killer
One set of numbers I commonly see referred to is Capacity as a substitute to passenger numbers to analyse past performance. This is like Kryptonite for Travel Retailers and Travel Retail Brands. Using these numbers is the surest way of creating a mis-guided future strategy.
I will use another example to demonstrate this point. In London, there is the Wembley Stadium. It is a venue that can hold 90,000 people. Now, if you have a local football team playing there… would it fill to capacity? Unlikely. Just because the stadium holds 90,000 people, it does not mean there were 90,000 people at any given game. The same with flights and airports. Different airlines and routes have varying load factors.
Of course – we can always say ‘we have to use what we have got’…. My response… try making bread with sawdust instead of yeast and let me know how you get on.
Capacity numbers are useful for some parts of the aviation industry, but not when trying to understand past travel retail performance.
Until next time….
Thanks for reading