Travel retail is emerging as a strategic customer acquisition channel for brands and retailers. It is now invaluable not just because of the sales it generates but also because of the power it has to supercharge brands’ global digital marketing and loyalty campaigns. Few – if any – of us would have imagined even three years ago how travel retail could come to assume an unlikely role in the future of digital marketing. They say that ‘history repeats itself’. Historically (setting aside the debate about whether modern travel retail was invented by Dr. Brendan O’Regan in 1947 or Messrs. Feeney and Miller (Co-Founders of DFS Group) in 1960), once you moved away from price differentials the value of the channel was frequently described as 'a shop window’ for brands.
The goal was to make repeat purchases to existing customers and equally to attract new customers through a mix of incentives (price savings & promotions) and disruption (packaging, exclusivity & POS collateral) who would go on to choose the brand when they weren’t travelling. This – combined with the air travel revolution – meant that sales grew and grew in line with passenger traffic, right up until the Covid crisis.
However, Covid is but the first of two crucial events. The second was Apple’s release of iOS 15 in September 2021 which, in developed markets removed about half of classic digital marketing targeting capability at a stroke by making it the default setting for the Safari browser to not track consumers browsing behaviour via third party cookies. Google will follow suit by the end of 2023 and deprecate third party cookies on the Chrome browser.
What this means in layman’s terms is that the increasing number of data privacy laws in all regions is affecting the ability of the big advertising platforms to implement an effective replacement. As a result, one of the most important sources of digital media campaign segmentation data will soon cease to exist,
So what does this have to do with travel retail?
The role of the channel for brands is once again evolving, moving from its historical role as a physical high traffic ‘shop window’ to being a place where brands can implement strategies to acquire and onboard that traffic onto their digital platforms to fuel their loyalty and wider marketing capabilities.
This is borne out by data, with surprisingly high numbers of users reporting no prior familiarity with multiple ‘internationally renowned’ brands across multiple geographies. Typical ranges are 20% to 35% of users reporting first-time awareness of brands in North America and Western Europe through to very high levels in Hainan – where the figures can be in excess of 65% (and sometimes much higher).
This should not come as a surprise. The traffic mix in the larger hubs is as diverse in terms of nationalities and destinations as you would expect; the difference now is that digital acquisition affords travel retail brands the concrete visibility they lacked prior to the pandemic. Digital customer acquisition is starting to generate data-sets for brands that are concrete in terms of quantitative visibility of their consumers – who they are, where they’re from, what they buy and when.
Later in the series we will go into more depth about how we combine active traveller signals monitoring, customer journey segmentation and consented data partnerships to build compliant, accurate and efficient audience pools to initiate and drive first-party acquisition from travel retail traffic.
At CircleSquare we are thrilled to be retained to support many leading groups and retailers in travel retail with their first-party data GTR initiatives. Over the next few months we will be releasing a number of articles of varying depths sharing our industry leading insights and rationale and, where possible, how we do this.
We are really excited by the changes digital disruption is bringing to the channel, we believe a fantastic new chapter is starting in what remains a fascinating area to work in.
Some of the topics we will cover in the coming series are set out below.
TR Marketing Fundamentals: a) Openness of consumers to new experiences when in a travelling state of mind b) Awareness vs Conversion driven campaigns (Pre vs In-Trip)
Pre / Post-Covid PAX Flows and commercial weighting of select nationalities
The TR Customer Journey: Overview & Why well-designed Customer Journeys are vital in the channel (as opposed to just listing a product and hoping for sales)
Travel Retail as First Party Data Acquisition channel: In-Trip & Post-Trip
Multi-Destination & Nationality Digital Media Strategy & Planning
Physical Activations: Disruption & Touchpoints
Read the original story on The Moodie Davitt Report here.