CORONAVIRUS & THE TRAVEL INDUSTRY- IMPACT & RECOVERY
Major Trends In Travel Retail Business To Look Forward To
Delays, cancellations in flights are some of the reasons why travelers spend hours and hours at airports. For retailers, they are a captive audience that they would hardly find outside the airport. It is an opportunity for retailers to offer travelers what they want whether it is local food options, cosmetics, souvenirs, or gifts for loved ones. Most travel retailers take advantage of this market and offer tax-free alcoholic beverages to travelers.
According to Allied Market Research, the?global travel retail market?is expected to reach $145.0 billion by 2028, growing at a CAGR of 14.9% from 2021 to 2028. Rapid development of the travel and tourism industry, increase in disposable income, and growth in urbanization have boosted the growth of the travel retail market.
The Covid-19 pandemic hampered the travel and tourism industry. But, when the travel resumes, the travel retail industry must be prepared for their customers. Here are some of the key elements to keep in mind:
Analyzing the market expenditure flows in other countries that currently have strong domestic travel experiences such as South Korea, China, Vietnam, and Taiwan can help understand the consumer sentiments. Even though shopping priorities for domestic tourists are different from international travelers, the analysis of local consumer markets can offer purchasing insights. During the pandemic, the demand for e-commerce skyrocketed, which may continue while on vacation. Thus, travelers may want to use local retailers to buy daily-use items.?
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While international and domestic travel is still restricted, airlines have been coming up with innovative solutions to promote travel shopping. For instance, the “flights to nowhere” in South Korea initiative taken by local airlines offered flights that take off and return to the same airport without going anywhere. However, these flights cross into Japanese airspace and offer passengers a chance to purchase tax-free items at the airport. The duty-free formats have gained popularity among travel retailers and they will continue to boom in the future.
During the Covid-19 pandemic, the demand for contactless payments increased more than ever. The worldwide penetration of smartphones and online payment apps would encourage cashless transactions in travel retail as well. What’s more, the increasing development of digital currencies would make the cashless transaction even smoother and secure for international travelers.Especially in Asia, the digital wallet and e-currency are gaining traction, and retailers must adapt quickly to such changing market dynamics.
The travel retail trends are becoming more and more interesting, immersive, and rely on customer experience. The travel retail market is focused on customer engagement and making their travel experience fun and unique. On the other hand, shoppers want to experience something new while traveling overseas.
The dead time such as waiting at gates creates a big opportunity for travel retailers to offer services such as personal shopping, food delivery to make use of the limited time of travelers. Moreover, the advent of new technologies such as AR and VR has made an impact on customers. In short, customers who travel to different places are looking for a new, unique experience and that’s why travel retailers must keep in mind.