Middle-aged shoppers are the most common gift shoppers, followed by millennials and seniors
The global pandemic caused a decline in gift shopping within travel retail, a trend that lasted even as international travel resumed, according to the latest global shopper research published by travel retail research agency m1nd-set.
According to the research, the once strong and growing segment of the travel retail market, gift shopping, has seen a significant decline in recent years.
It has dropped from 42 pc of shoppers making purchases in travel retail for gifting in 2020 to just 26 pc in 2023 and the first half of 2024.
The study identifies strategies to address and reverse the declining trend in the gifting as a purpose of purchase.
The report highlights the need for travel retail to reclaim its identity as the ideal destination for gift shopping by refocusing on merchandising, marketing and in-store experiences.
The research says that, however, gift shopping remains an integral part of the travel experience for many travellers still, despite the decline.
According to the study, purchasing souvenirs for loved ones, guilt-gifts for business travellers, or taking advantage of last-minute shopping opportunities, travellers are drawn to the convenience and variety offered by the travel retail environment.
It says that duty-free tax benefits, discounted luxury goods and unique, exclusive products continue to be key motivators for gift shoppers, the research reveals.
For many shoppers in travel retail cultural gifting traditions play a critical role in their decision to purchase gifts.
This is particularly relevant among nationalities with strong gifting cultures, such as certain Asia Pacific and Middle East nationalities.
The study suggests that shoppers from Japan, the Philippines, and Saudi Arabia top the rankings of gift purchasers in travel retail.
The research also reveals the key demographics of the main gift shopping segments. Gift shoppers in travel retail tend to be predominantly male with 56 pc participation and leisure travellers with 74 pc participation, with the average age being 40.
According to the m1nd-set research, middle-aged shoppers are the most common gift shoppers, followed by millennials and seniors.
The most popular categories for gift purchases include souvenirs and gifts, toys, perfumes and confectionery, with seven out of 10 purchases in the souvenirs and gifts category made for gifting purposes.
Just over half or 56 pc of purchases from the toys category were for gifting in H1 2024. There is a notable difference between the top two categories for gift purchases and the next, according to m1nd-set.
The study says that perfumes rank third, with 29 pc of purchases made for gifting.
The research says that confectionery and jewellery and watches share fourth place, with 27 pc each.
Alcohol and clothing and accessories follow, with 25 pc of products in these categories bought as gifts.
While formal gift purchases have declined slightly, informal gift shopping has risen, according to the research, with planned purchases of informal gifts growing from 69 pc in 2021 to 77 pc in 2024.
Despite the importance of price for many shoppers, price comparison behaviour among gift shoppers is lower than that of non-gift shoppers.
The research says that 55 pc of gift shoppers compared prices before making a purchase in travel retail, compared to 59 pc of non-gift shoppers.
The research unveils the importance of the gift shopper to the overall industry performance. Average spend among gift shoppers is higher than shoppers purchasing for other purposes. Gift shoppers spent USD 153 on average compared to USD 132 among non-gift shoppers.
According to m1nd-set, travel retail exclusives tend to attract gift purchasers quite significantly more than the global average.
Gift shoppers are more engaged with both communications touchpoints and sales staff, presenting an opportunity for travel retail operators to increase revenue by refocusing their marketing and sales efforts around the gifting experience.
According to m1nd-set study, the higher likelihood of gift shoppers noticing touchpoints, engaging with sales staff, and opting for travel retail exclusives presents a clear opportunity for incremental sales and revenue growth.
By focussing on merchandising, packaging, marketing, in-store design, and communications to highlight the numerous gifting occasions, retailers can drive conversion and revive the gift shopping trend in travel retail.
The research also recommends tailored sales training for engaging key nationalities with strong gifting traditions, along with thoughtful merchandising and communication strategies, are critical to reversing the downward trend.
It says that sales associates must not only understand their gift shopping habits of the nationalities with a stronger tendency to purchase gifts in travel retail, but also know how to approach these customers using the right verbal and body language.
Peter Mohn
“It is crucial to reposition the travel retail environment as the go-to destination for purchasing gifts while travelling. This requires travel retail stakeholders to rethink their approach, ensuring that travellers naturally associate airports, cruises, or inflight shopping with all the key reasons and motivations for buying gifts,” says Peter Mohn, CEO and Owner at m1nd-set, explaining how the decline in gift shopping as a primary purpose of purchase and the need for a strategic shift in how travel retail stakeholders engage with customers.
This becomes even more critical given the higher spending habits of gift shoppers. There are practical, easily implementable solutions to reverse the declining trend in gift purchases, Mohn adds.
“Another important trend, the research reveals, is the significant shift towards greater self-indulgence. Travel retail stakeholders need to take this change in emphasis in purchase destination into account and capitalise on this trend as well. While it’s important to reposition travel retail as the go-to gift purchase environment, it is also now necessary to ensure category management and marketing appeals to the increasingly dominant self-indulgent shopper” Mohn says.
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