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In 2023, the travel retail industry, which has thrived on the convergence of tourism and commerce, is at a crossroads. Today's challenges call for an innovative approach to maintain the sector's vitality.
After meeting travel retail players such as Havas voyage,Marseille airport and Air France at the IFTM (International & French Travel Market) trade show in Paris, we decided to take a closer look at the main challenges facing travel retail, and the ways in which industry players can meet them. We analyzed the main challenges facing travel retail, and the ways in which industry players can to improve their profitability and business model.
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The enjeux faced by the of Travel Retail in 2023
- Global economic uncertainty
Persistent fluctuations in the global economy are plunging travel retail into worrying uncertainty. Diminishing consumer purchasing power and changing travel habits pose major challenges. - Digital transformation and e-commerce
The advent of e-commerce and the digitalization of commerce have transformed consumer behavior. Travel retail, traditionally anchored in physical stores, must adapt to the digital age. Establishing a solid online presence and integrating it seamlessly with in-store experiences is a major challenge. - Sustainability and ethical consumption
Travelers are demanding that travel retail outlets adopt environmentally-friendly practices. Tour operators must juggle the complexities of sourcing sustainable products, minimizing waste and promoting green initiatives. - Supply chain disruption
Travel retail relies heavily on complex supply chains involving the coordination of various stakeholders. Global disruptions, whether caused by natural disasters, geopolitical events or health crises, can have a major impact on the smooth running of these chains. - Changing consumer preferences
especially among the younger generations, are evolving, requiring the adaptation of travel offers and marketing strategies. Understanding and adapting to these changing preferences is crucial to maintaining relevance and competitiveness.
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How can strategic consulting play an essential role?
- Strategic business model redefinition
Reassess and redefine their business models to align with current market dynamics. This may involve diversifying product offerings, optimizing pricing strategies and identifying new sources of revenue.
For example, duty-free outlets can benefit from advice on optimizing their product assortment, adjusting their pricing strategies, and improving the customer experience. It is also important to help them understand complex regulations and adapt to market changes.
- Digital transformation and Omnichannel integration
Guiding travel retail players in adopting digital transformation, developing e-commerce platforms and integrating online and offline experiences. One approach Omnichannel can improve customer engagement and satisfaction.
Airlines can benefit from advice on maximizing in-flight retail revenues, designing attractive loyalty programs, and developing strategic partnerships with brands.
Luxury brands and other FMCG suppliers, such as cosmetics, perfumes and spirits, can benefit from consultancy to optimize their travel-retail presence. This can include managing their point-of-sale presence, developing advertising campaigns tailored to travelers, managing product assortments, and negotiating contracts with distributors.
- Resilient supply chain management
Support the development of robust and flexible supply chain management systems, such as supplier diversification, use of advanced technologies and contingency planning. - Analytics-driven data and personalization
Leveraging data analytics provides valuable insights into consumer behavior. This information can be used to adapt marketing strategies, personalize customer experiences and optimize inventory management.
Airport and station operators can benefit from advice to analyze their walkways and optimize store layouts, attract attractive brands, and create shopping experiences that meet travelers' expectations.
Faced with unprecedented challenges, travel retail is at a decisive turning point. Consulting is emerging as an indispensable ally, offering tailored solutions for navigating complexity and uncertainty. By adopting innovative business models, harnessing the power of digital transformation and committing to sustainable practices, travel retail companies can not only overcome obstacles but also thrive in the ever-changing global market landscape.
The reasons why these players call on consulting services vary, but generally include revenue optimization, improving the customer experience, adapting to local and international regulations, managing complex operations, and creating effective marketing strategies tailored to the travel retail context.
By Noémie Lecarpentier
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