5 Strategies in Duty Free Retailing to Compete and Proliferate in the Industry
The duty free retailing stores or shops need to up the ante and apply several strategies to raise their business. The profits of duty-free retailers are often affected by circumstances that are beyond the retailer’s control. In order to make huge profits in the duty-free retailing industry the retailers need to become smarter and employ a few smart strategies.
The competition in the retail business is at its peak, and this is mainly because people are moving toward online retailers. Thus, the duty free retailing stores or shops need to up the ante and apply several strategies to raise their business. Some methods used by the prominent players of the duty free retail industry are proving to be successful, while others are observed to be annoying for potential customers. Duty free retailing is a highly regulated retail environment mainly operating at international airports and ship terminals.
The profits of duty-free retailers are often affected by circumstances beyond that are beyond the retailer’s control. Anything from weight restrictions on luggage to exchange rate fluctuations to international politics can have a radical impact on luxury sales. Also, there is a rising competition from the online domain, where luxury discounters are making huge profits. So what strategies to be applied by the duty-free operator to stand out against the competition?
According to a Research Dive analyst review, the global duty free retailing market is anticipated to grow to about $139.4 billion by 2026, from an estimated $74.2 billion in 2016. Research Dive forecasts the Asia-Pacific market will experience a significant growth, with the predicted sales in to double in upcoming years. Hence, to make huge profits in the duty-free retailing industry the retailers need to become smarter. Some of the smart strategies applied by top market vendors to keep up in the competition are listed below:
1) Creating Personalized Brand Experience
The majority of the DFS Group is owned by LVMH. LVMH, multinational luxury Goods Corporation is now taking advantage of DFS’s launched WeChat’s new Mini Programs. This service enables businesses to create personalized brand experiences within the largest platform of social communications of China. The WeChat Mini Program, allow customers to pre-order and browse duty-free products on the basis of location. Currently, users have the benefit of ordering more than 300 products from the San Francisco Airport location. In the coming years, this program will be seen sloping towards other DFS duty free locations in the U.S.A.
A cross-border mobile payment system, CITCON is partnering with DFS Group to pilot WeChat Pay at T Galleria by DFS and San Francisco Airport. WeChat Pay enables Chinese consumers to make purchase with Yuan via WeChat mobile wallets.
Another example is the partnering of AirAsia and Plaza Bali Duty & Tax Free. An inflight e-commerce website was launched by AirAsia in 2018 namely ‘OURSHOP’, where customers are allowed to explore various products and also have multiple delivery options such as downtown, onboard, and airport to home delivery.
3) Turning to Technology
A Swiss-based travel retailer, Dufry AG is turning to technology in order to get customer’s attention. Using this digital strategy, Dufry has now opened first two New Generation Stores in Madrid and Melbourne. The new generation stores provide a unique experience, which enables the company to adapt messaging, and offers & promotions to different traveler profiles. This stores have digital screens, which changes all over the day to match the product preferences & languages of the travelers.
4) Walk Through
In order to push sales some of the major market vendors have employed a strategy of ‘walk through’. This strategy forces travelers on their way to gates to take involuntary slogs. The Atmosphere Research Group has employed this strategy which is proving to be beneficial for them. The walk through concept clobbers the tourists over the head, where you are not allowed to exit the airport or enter the area of departure without passing through duty-free. Though this concept annoys the business travelers, but it’s beneficial.
5) Sizing Up the Local Competition
The operators of duty free stores frequently are unaware of the ecosystems within which they are operating. They just keep eye on the local markets, which also includes the mortar and brick luxury retailers. The retailers need to be constantly aware of the promotions and need to be updated in the local market. Hence, the duty free retailing shops or stores should launch unique and travel exclusive products. The retailers should focus on retailing luxury brands directly related to the destination.
A Brief Survey of Wireless Brain Sensors and Three of its Main ApplicationsNovember 25, 2022
A Concise Study of Duty-Free Retailing Industry’s Three Major Players in 2022November 14, 2022
Electric Bus: An Innovative Mode of Transportation that can Tackle Rapid Climatic ChangesNovember 14, 2022
A Brief Survey on the Utility of Automotive Ethernet SystemsNovember 14, 2022