ForwardKeys report warns that retailers can no longer treat Big Data and artificial intelligence as a luxury or a just another fad
With the return of a semblance of normalcy in air traffic in many parts of the world, airports are coming back to life as number of passengers continues to rise sharply, boosting prospects of various service providers related to airports and aviation industry. One of the key services that many, if not most, passengers use or at least browse through are the airport retailers, especially the duty free shopping opportunities while they wait to catch their flight or exit the airports at destinations.
A report by data aggregator and analysis firm ForwardKeys should come as a confidence booster for the trade as it points towards tools that retailers can use to enhance sales by targeting their customers and potential customers with pin-pointed precision.
The report says that one thing the pandemic has tested is the ability for travel operators and retailers to be agile and receptive to new changes and still make some returns upon investment. The report goes on to add that while the travel retail sector has seen a fair amount of maturity in a short period since the advent of Covid-19, for them to stay ahead of the game, they would need to use new rules and new tools.
It says that retailers can gain an edge over peers by applying Big Data-based intelligence with real-time granular information such as the volume of travellers at certain airports, down to the nationality and traveller profile, brands, and retailers can now differentiate between potential shoppers and returning locals.
“Having this simple distinction means as a store, brand or duty-free, you can expect who will spend more time in the airport, at your terminal and store – being more inclined to test your new range of promotions, shop for gifts or look for souvenirs to take home,” says Marina Giuliano, VP of Travel Retail and Brands at ForwardKeys.
The report goes on to say that simply by differentiating the traveller types, retailers can improve their product placement, for a broad variety of passengers, be it those in a rush or those with time to dwell. The retailers can also use real-time data to launch new promotions or build in-house brand experiences such as a pop-up store.
The report distinguishes four broad types of travellers at airports. First is those on a layover, then there are people with short or long transits, people travelling to many destinations in a single journey or those ending their journey at the airport where the retailer is placed.
Big Data is big differentiator
ForwardKeys says that through its product Travel Statistics, airport retailers from across the world can use its extensive data pool. The report says that its data stands out for its level of detail or granularity.
It goes on to add that the identities of big spending nationalities have changed, especially as China, which was the largest spending nation in the era before Covid-19 outbreak, remains closed. However, other nationalities have emerged as large spenders and even the key source markets have changed over the past two years.
“One thing we’ve noticed throughout the Covid-19 crisis is the step count may be lower than before, however, the purchasing power has increased. So, pick and choose wisely who you wish to draw into your stores. Do you want just anyone or prefer to entice those shoppers you know for certain will be at your terminal and will spend?” says Gordon Clark, VP of Business Development for Travel Retail & Brands at ForwardKeys.
ForwardKeys says that an extra advantage is the competitive edge Traveller Statistics provides. “In the Passenger Analysis section, under Retailers, you can measure the level of interactions on any given day or time, your competitor has had. Or even the new business opportunity a certain airport may hold as it has no travel retail offering at all,” adds Clark.
The report warns that retailers can no longer treat Big Data and artificial intelligence as a luxury or a just another fad. It says that a number of data-aware retailers have begun using Big Data as the main differentiator. “It’s true that in the past many brands and retailers thought that data was a nice to have, but what this crisis has highlighted is that actually, it is a necessity,” says Giuliano. “Many companies are now building their travel intelligence tools and dashboards.”
