Airports are beginning to successfully combine physical and digital retail, in a way that makes shopping an easy, convenient and engaging part of the traveller’s journey. In March, Fraport and Heinemann launched home delivery for pre-ordered duty free through their Frankfurt Airport Retail joint venture.
Porter Erisman, entrepreneur, e-commerce consultant, and former Vice President of Alibaba Group: “My advice would be to find ways to create a seamless experience by engaging with potential customers prior to, during, and after their travels.”
Porter Erisman, entrepreneur, e-commerce consultant, and former Vice President of Alibaba Group, the world’s largest e-commerce company, interviewed by Ross Falconer.
It is almost impossible to talk about retail these days without mentioning e-commerce. Global retail e-commerce sales grew 24% to $1.91 trillion (€1.7 trillion) in 2016, accounting for 8.7% of all global retail spending, according to eMarketer, and the trend looks set to accelerate further.
It is a challenging time for travel retail. Generation Research figures show that global duty free & travel retail sales rose a modest 2.5% to $63.6 billion (€57bn) last year, while in Europe they fell by 0.1% to $18.83 billion (€16.8bn).
Porter Erisman, entrepreneur, e-commerce consultant, and former Vice President of Alibaba Group, believes that “for businesses that approach the e-commerce boom with an innovative spirit, this is a trend which offers more opportunities than risks.”
Indeed, we are beginning to see airports successfully combine physical and digital retail, in a way that makes shopping an easy, convenient and engaging part of the traveller’s journey. For example, in March Fraport and Heinemann launched home delivery for pre-ordered duty free through their Frankfurt Airport Retail joint venture.
Erisman served as Vice President at Alibaba Group for eight years, as the company grew from a start-up in founder Jack Ma’s apartment into the world’s largest e-commerce company, and is uniquely-positioned to offer insights into understanding the e-commerce boom in emerging markets.
“The most exciting retail trend is the emergence of international travel as the new luxury experience for middle-class Chinese,” he says. “It’s no longer good enough to own the new iPhone. Now, Chinese consumers want to post photos of their adventures abroad on social media to share their experiences and share their status. There are more Chinese travelling abroad than ever, and their purchases represent an increasingly large proportion of retailers’ sales, even in Paris and Milan.”
At the same time, these travellers have adopted e-commerce at a faster rate than their Western counterparts. So it is important for brands and retailers to not only understand the Chinese consumer, but also understand the Chinese e-commerce ecosystem. “Understanding both will help retailers understand how to catch the Chinese consumer at key touch points,” Erisman explains. “My advice would be to find ways to create a seamless experience by engaging with potential customers prior to, during, and after their travels.”
Mobile apps like WeChat and Tmall are playing an increasingly important role among Chinese consumers, and can provide innovative new ways to drive customers into travel retail outlets. For example, when a customer books a flight, that data can be used to trigger a shopping promotion when the customer reaches the airport to help drive traffic in-store. “At the retail outlet, different measures can be taken to create more engagement on social media, to alert other potential travellers to shopping opportunities,” Erisman comments. “The seamless integration of online to offline is becoming increasingly important.”
This evolution is something to be embraced, rather than feared. Airports and retailers who embrace the age of e-commerce will be well positioned to grow their businesses.
We are living in a golden age of travel, where, for the first time, hundreds of millions of consumers from emerging markets are able to go abroad. And as they do, they are demonstrating a keen interest in shopping as one of their main travel activities. “We are also living in a golden era of e-commerce, where these same consumers are using their mobile phones in innovative ways to shop online. These two trends, if embraced by travel retailers, represent a golden opportunity. But only the nimble retailers who embrace e-commerce, rather than fear it, will grow and thrive,” Erisman concludes.
