m1nd-set sees significant growth potential for GTR from E-commerce

The latest research from indus-try research agency m1nd-set unveils significant room for growth in the online and mobile retail channel within global travel retail.

The agency says that operators can increase overall travel retail sales by a more streamlined approach to e- and m-commerce.

Awareness of service is key

Compiled from interviews conducted among more than two thousand global travelers from July and October this year, the research underlines the lack of awareness among travelers of the online and pre-ordering services proposed by duty free retailers.

Only about one third of travelers were aware of the possibility to pre-order their duty free products online and just over one fifth, around 21%, of all travelers said they had actually pre-ordered their products via the duty free retailer’s website at least once in the past three years.

m1nd-set Business Develop-ment Head, Anna Marchesini, commented on the findings:

“When shoppers are aware of the online or mobile commerce applications, the majority, around 7 out of 10 shoppers, do actually use these services to purchase or pre-order.

“The majority of shoppers who pre-ordered their products online did so prior to traveling, from home, which demonstrates the pot-ential to increase sales if marketers program online campaigns to reach travelers who have either just booked or are about to embark on their international trip and entice them with duty free shopping offers.”

“Timing is an essential ingredient when marketing to prospective duty free shoppers,” said Marchesini.

Most who pre-order buy more instore

 “The majority of travelers visit the retailer websites well ahead of their trip, with around two thirds of shop-pers who pre-order doing so within up to one month ahead of their interna-tional flight,” she continued.

Interestingly, online sales do not necessarily cannibalize the in-store sales when the traveler arrives at the airport since six out of ten shoppers who pre-ordered online also went on to purchase in the duty free shops, noted Marchesini.

Understanding motivations

Understanding the motivations to purchase is important when marketing the online pre-ordering service to travelers. Main purchase drivers for pre-ordering includes the opportunity to buy special promotions offered exclusively online and the offer of attractive gifts with purchase.

Shoppers who pre-ordered also cited a safer and more pleasant experience, special airport retail exclusive editions and the advantage of not carrying the shopping items around the airport, where home or gate delivery or pick-up on arrival at destination options are offered, as other benefits.

Why not pre-order?

     Travelers who do not pre-order said that lack of knowledge about the service tops the list of reasons why they do not buy online before the trip. Only around one third of travelers were aware of the duty free pre-ordering service, said m1nd-set.

Other reasons for not pre-ordering include a preference for a physical shopping experience and the possibility to browse in-store and touch, taste and feel the pro-ducts prior to purchasing.

    They also cite a lack of attractive promotions, purchasing on impulse and not being able to discern the product quality when browsing online as reasons for not pre-ordering.

Travelers said the lack of sophisticated technology to judge the product quality, including virtual reality presentations, live customer service chats or explan-atory videos to demonstrate the product quality were further barriers to purchase.

“The behavior among shoppers who pre-order varies quite considerably across regions and categories, both in terms of which categories are purchased and how much is spent on each category. Variations are also quite significant when breaking down the data and analyzing by sub-category within the core categories such as Food, Alcohol and Beauty, as well as by age and gender segment,” said Marchesini.