Millennials are outpacing Baby Boomers in their travel frequency. Coupled with the generation’s impressive spending power, travel retail has the opportunity to leverage the selective spending habits of this growing force. A recent report by Nielsen shared key categories and marketing strategies that will prove the most fruitful.
The extensive research portrayed the travel retail market as primed for huge up-selling. A $63.5 billion global market, it’s projected that the sector will expand to an $85 billion revenue channel by 2020. Given that there are approximately 1.8 billion Millennials globally who are not only willing to travel, their career growth will improve the likelihood of the demographic to only increase their frequency in travel.
Here’s the kicker: This isn’t your parents’ annual holiday. Millennials apply their scrutinizing, deal-hunting, experience-driven tactics to their travel. This isn’t bad, just different. This will prove beneficial to airport shops — as such steal-hungry shoppers, Millennials secure money for additional purchases. This is seen in the results of Nielsen’s survey: The study found that 63 percent of Millennial travelers have purchased a premium or luxury item such as watches, jewelry, clothing and accessories while on the road.
The Millennials are a self-indulgent set. They congratulate themselves for a job well-done. Making it through security deems a necessary award-winning activity that’s rewarded by a little airport-travel treat. The research found that more than 63 percent of Millennial travelers will visit an airport shop to spend time; about 44 percent will visit a travel retailers to scoop up a gift, and more than 33 percent noted that they visit an airport store to treat themselves.
Recall the demographics’ value of experiential retail here. The bulk of these shoppers are already looking to spend superfluous time in shops. Look to opportunities to appeal to these travelers’ sensibilities and tactical needs — in-store charging stations, special promotions partnered with discount travel services and cloud-enhanced profiles will be appreciated and extend time spent in-store.
Though in-store experiences will resonate with Millennials, nothing draws these shoppers like a good deal. Trailing behind the near 71 percent of the shoppers who will visit a store to buy an item that isn’t available elsewhere, more than 53 percent of the Millennial travelers noted that they are drawn by window displays — almost 47 percent said promotions landed them in an airport shop.
Remember that Millennials aren’t gullible. These price-investigators will resist retail temptation if the price doesn’t differentiate from other venues for spending, making special promotions and aggressively priced items a must for in-airport shops. Beauty, specifically fragrances, tended to be the most popular items given the size of packaging — about 50 percent of those polled said they were interested in buying within the category.
In preparation of the report, Nielsen in partnership with SDA Bocconi researched about Millennial travelers in Europe, Asia and the Americas during the summer of 2016. Insights were garnered from analysis of current travel retail sources and secondary data. Nielsen also surveyed 479 Millennials and analyzed responses of 373 of the participants in order to track preferences and behaviors of Millennials, specifically in regards to airport shopping. What’s more, Nielsen also interviewed luxury brand managers, airport managers, and held a focus group.