Travel Retailers: Groundbreakers for traditional Retail?

I think we are only at the beginning of fundamental changes in travel retail. The market, already bearish in 2015, lost additional momentum in 2016. Margins are also under considerable pressure. Moreover, the statement that duty-free prices are cheaper than elsewhere hasn’t applied for a very long time. And more and more consumers prefer online shopping to the offline variety.

The providers, above all airports, which are important for the overall market, do not want to stand idly by. Though airports, technically speaking, aren’t retailers, they nevertheless structure their leasing models for stores in such a manner as to have a stake in revenue. If sales decline, airports lose as well.

Airport E-Commerce is a complex business, as the various order-, delivery- and – to some degree – returns options must be structured for both on- and offline channels. The learnings gleaned from the multi merchant omnichannel project with the Frankfurt Airport are groundbreaking. The E-Commerce architecture exhibits a complexity that is without parallel. The worldwide interest by airports in our OM³ solution is correspondingly high.

After all, traditional retail is in quite a similar situation. Here too, decreasing revenues and shrinking margins can be found everywhere. Retail needs to move forward.

Here, the players that control the market are mainly brick-and-mortars too – and they are systematically losing market share simply by the fact that revenue streams are flowing more and more toward online offerings. Until now, the logical strategy was to simply establish an own online version of the stationary store – a strategy, however, that hasn’t been followed through with much consistency. We are all familiar with large department store chains; huge stores in the inner cities and an amateurish online shop. Accordingly, most of these endeavors are correspondingly low in revenue.

What astonishes me repeatedly is that conventional retail doesn’t really use its strength – physical presence. For this fact, even if pure-play protagonists naturally fail to recognize it, is also a considerable advantage. An advantage, which in my opinion decision-makers in traditional retail interpret incorrectly. For, instead of thinking in comprehensive customer journeys and thus creating a seamless, greatly improved customer experience, they never tire of touting personal contact, the ambiance, brand worlds, etc. as advantages.

This might have been correct – and important – during the past millennium, in today’s world, however, those players win who can provide the best and most integrated customer experience across all channels. And those players win who make things for their customers as simple as possible. It is here that airports in cooperation with their duty free vendors are currently performing pioneering work.