Of course, the industry has dealt with worse. The 9/11 incident sent shock waves through our channel which took a while to recover from.
The other major even that has happened in recent years was the banking crisis in 2008. I still firmly maintain that this was probably the best thing that could have happened to Travel Retail. The industry was lucky because there was a sudden influx of large spending passengers – the Chinese – who were keen to spend, spend, spend.
But why am I saying that the banking crisis was good for our industry?
The huge economic effect of the crisis led retailers (and the forward thinking brands) to re-think their strategies. Putting product into store and hoping it would sell (let’s face it, it normally did) was no longer good enough. Targeting the Chinese was now the way forward. This helped retailers re-think their offer and its implementation with the goal of converting more Chinese passengers. Some mastered this more effectively than others but on the whole, the industry did well.
As the Chinese spending has been curbed, some retailers started to target Russian passengers. Of course, with the economic woes that face Russia, this might be a little more complex.
The point here is that Travel Retailers began to target specific nationalities to try and improve conversion and basket size. This specific targeting can only be a good thing.
Maximising Every Opportunity
This shopper targeting is a where marketing comes into its own. Travel Retailers are likely to shift their position to become more marketing led rather than retail operations led to better equip themselves to maximise every opportunity.
The Chartered Institute of Marketing’s definition of Marketing has never been more relevant….
Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.
— The Chartered Institute of Marketing
The Future – Who Will Win?
Targeting nationalities is one approach that will of course deliver benefits for retailers and brands. It has been a proven formula. Should retailers continue to follow this path and work their way through the list of key nationalities, the efficiency and effectiveness will dwindle.
There is a better way.
I recently spoke with one of the largest retailers in our channel. I asked them one simple question. It was a lightbulb moment. Should they fully act on the answer to that question, they will achieve 2 key things:
- A step change their sales growth
- Significantly improve their chances of winning tenders
This leads us to 3 critical elements of success. Who will win in 2015? The retailers that will win and achieve a competitive advantage will be those that:
- Are willing to change
- Are prepared to act
- Deliver on those actions
The key of course will be knowing where to look.