I have attended a Kantar Retail event this week on Amazon in Europe.
It was a fascinating insight into online shopping and the long term vision of this company: a technology company first, retailer second and studio third. Bryan Gildenberg and Robin Sherk from Kantar presented a full day of insight into Amazon, due to become the #2 global retailer by 2017.
Personally, my only experience of Amazon is as a consumer, and as a Prime member at that given my increasing levels of spend and choice going through them. Their customer service is second to none, no questions asked. It reminds me of the John Lewis’ level of service in the UK and I guess this is what they are instilling in a whole generation of new and tech savvy consumers. From a work perspective, I have worked directly with Tesco.com, although this was a while back and the overall online approach and offer has developed significantly since those days. The bottom line is that Amazon’s digital infrastructure and fulfillment centres make them a uniquely compelling brand to consumers.
Duty Free (or Travel Retail as it is referred by the trade if not the consumers), remains a unique channel with plenty of opportunities to engage and delight consumers in equal measure. I have previously written about the challenges of travel retail on this blog: Is Airport travel retail heading towards breaking point?
The need to focus on consumers and for the trade to work together – as a Trinity of Brands, Airports and Operators – remains the same in order to drive the overall offer proposition and benefits to those involved. Additionally, there are worrying trends developing relating to the value perception on offer. Duty Free channel value perception seems to be gradually eroded whilst at the same time enhanced via Amazon in the eyes of the consumer.
Travel Retail operators such as World Duty Free have previously pushed a ‘price promise’ in comparison to the UK high street, however this is based only on the variable of price and does not enhance the overall value proposition being offered to the consumer. Duty Free can enhance value further by offering travel retail exclusive products not to be found in the local high street; personalisation and other gift related services; convenience such as shop & collect with differentiated offers and range; an offering reflecting sense of place; treating regular travellers differently and better capturing their attention and share of wallet; etc. Some, if not all, of the above is already available and taking place across some duty free locations, however the communication and engagement with consumers is not yet integrated in approach and clear to potential shoppers. One sign of this is how few consumers understand the term ‘travel retail exclusive’ in products and how few are therefore aware of the unique offerings created by brand owners and exclusive to the duty free channel.
If I was to paraphrase Kantar Retail:
“Technology is an enabler (for Amazon) to enhance and remove friction across the path to purchase: shopping -> purchasing -> fulfillment”.
However the Duty Free channel also has the potential to delight by offering the opportunity to shop unique products and services available immediately, whilst bringing the brand essence to life through engagement and leading the consumer to purchase by making the shopping process and delivery options simple and consistent.
This week’s saturday essay on The Grocer magazine (21st May 2016 edition) on the subject of Amazon stated such extracts as, “consumers have an emotional relationship with food and the importance of provenance cannot be underestimated. Premium customers are more likely to want to know the origins of a product than shoppers on a budget. Authenticity is everything”.
Reflecting on the above comments, an opportunity remains open for the duty free channel to deliver against the consumer needs and to communicate them effectively during the various touch points of the traveller’s journey. Duty Free shopping remains a strong proposition if it can deliver on the Shopper’s needs.
“You don’t do business with Amazon, you do business through Amazon.”
As a final comment, Amazon is a platform for brand owners and whilst it does not offer the same type of platform to engage with consumers as the duty free channel, it creates tools allowing brands to test & learn different strategies, to communicate with the consumer differently to bricks and mortar and to ultimately become a shopping habit rather than an active choice by consumers. The Duty Free channel (and all of us involved in it) needs to remain vigilant of this impending threat and act with a sense of urgency if it wants to become more than just a museum for luxury brands.
Note: All views on this post are my own and may not necessarily reflect the views of my employer. Others quoted on this post were used for context only.
This blog was originally published in May 2016 on LinkedIn