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Understand the Travellers & Increase the Purchasing at Airports in the Baltic Region DFNI Riga, November 2010

Understand the Travellers & Increase the Purchasing at Airports in the Baltic Region DFNI Riga, November 2010 . Passenger's Demographics. Main nationalities (besides Latvian, Estonian and Lithuanians) Germans British Finnish Swedish Around 20% business travellers, 80% leisure

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Understand the Travellers & Increase the Purchasing at Airports in the Baltic Region DFNI Riga, November 2010

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  1. Understand the Travellers & Increase the Purchasing at Airports in the Baltic RegionDFNIRiga, November 2010

  2. Passenger's Demographics • Main nationalities (besides Latvian, Estonian and Lithuanians) • Germans • British • Finnish • Swedish • Around 20% business travellers, 80% leisure • About 75% fly 1-5 times per year, 10% fly 10+ per year • All age groups represented • Younger flyers significantly improving

  3. Satisfaction with Duty Free Shops

  4. Evaluation of Airport Shops in the Baltic Region • Overall atmosphere • Architecture and design • Local products • Customer treatment & care • Quality of establishment • Size of establishment

  5. Evaluation of Airport Shops in the Baltic Region • Variety of brands • Limited amount of Duty Free exclusive products • Variety of assortment • Amount of promotions & special offers • Lack of limited editions • Price level

  6. Let’s take a look at the current shopping behaviour & attitudes…

  7. Footfall & Conversion Rates 100% of international Travellers 52% visit the Duty Free Shops 27% buy at Duty Free 52% 52%

  8. Reasons for going into the Duty Free shops To stock up / buy things I need (cigarettes, alcohol, cosmetics, perfumes) To browse around and see if I can find something I might like to buy Buy some local souvenirs To buy premium products at good prices Kill time To buy products I can not find at home (mainly locals) Find presents for my beloved

  9. Reasons for not going into the Duty Free shops Do not need anything Do not want to carry anymore items Duty Free Shops always have the same boring products Will buy elsewhere on trip Do not have enough time No more money to spend Prices to high compared to domestic market

  10. Items Purchased at Sections Liquor Fragrances Cosmetics Tobacco Souvenirs Fashion Accessories Jewellery Electronics The 25-35 year old are the most likely to buy, the 45+ the least ~ 80% ~ 10% ~ 10%

  11. Mind-set of travellers: Airside High Street • Positive excitement • Open for exploration • Sense of change • Positive travel experience starts • Pleasant anticipation • Liberation • Relaxation Opportunity • Insecurity (confusing environment) • Boredom (due to waiting time) • Tiredness • Routine Behaviour (frequent Travellers) Challenge

  12. Returning Home: Inbound Flight • Guilt • Gifting • Relaxation process starts (business) • No burden of additional luggage pieces • Saying “Good bye” - Souvenir • Spend local currency • Stock up for home Reasons to purchase

  13. What is really important for the traveller…?

  14. …it depends!

  15. Different People, Different Needs • Each individual traveller has individual needs – impossible to fulfill ! • Important to: • Understand the whole range of needs • Define priorities • Cluster and develop segments • Offer product categories and brands for all segments‘ key needs

  16. Different Segments – Different Needs

  17. Main Segments within Travellers • The Addicted (~10%) • 75% buy on every trip • 65% Women • Often business travellers • DF Shopping important part of flight • Want to find premium products • Like to buy exclusive gifts at DF, impulsive behaviour • What to do to increase sales: • Limited editions & travel retail exclusives • Range of premium products across categories • Regular change of products & brands variety within categories

  18. Main Segments within Travellers • The Aversive (~40%) • Hardly visit Duty Free shops • 70% Men, mostly medium age or older • Mainly irregular travellers • Think all DF shops are identical • Think DF shops have limited range of brands & products • Do not enjoy DF shopping • What to do to increase sales: • Show attractive displays & promotions at shop entrance to increase footfall • Offer more local / regional products to create interest • Enhance more “low budget” products

  19. Main Segments within Travellers • The Deal Hunter (~15%) • 70% buy regularly • Relatively frequent travellers (many 5+ times per year) • Look for premium products and good savings • Often business travellers (know at which airports to find best deals) • Only purchase if clearly perceived savings • Visit & purchase across categories • Often buy presents / gifts • What to do to increase sales: • Visible offers & promotions across categories (showing % saving) • Offer significant range of gifting and limited edition

  20. Main Segments within Travellers • The Time Killer (~25%) • Most buy seldom at DF shops • 60% Women • Typically between 18-40 • Travel infrequently (usually 1-3 times per year) • Go to DF shops to kill time and browse around • Like to follow latest trends and are open for “new” & “original” products • What to do to increase sales: • Offer innovative , limited editions & travel retail exclusive products • Products with a local touch & souvenirs

  21. Main Segments within Travellers • The Adventurous (~10%) • Travelling makes them in a special & adventurous mood • Stress-relief after checking in and passing security • Mostly Women • Travel infrequently (usually 2-5 times per year) • Like to give themselves a treat • Very impulsive behaviour • Open for luxury products (Accessories, Perfumes & Cosmetics) • What to do to increase sales: • Offer line extensions of famous luxury brands • Variety of self-indulgence products for women

  22. Nine Key Learnings from Research • Offer products across categories to meet the needs and interests of allsegments • Vary parts of the products regularly to keep up interest of frequent travellers • Meet the curiosity mood – impulsive behaviour - of not so frequent travellers

  23. Nine Key Learnings from Research Increase the amount of limited editions & travel retail exclusive products (gifting) Assure a significant amount of products with a local touch & souvenirs Show attractive displays & promotions at shop entrance to increase footfall

  24. Nine Key Learnings from Research • Offer range of products the main visiting nationalities cannot buy at home • Include product range for outbound and inbound travellers • Hire only engaged & competent staff to make customers feel unique and recognized

  25. Traveller´s transparency does not come naturally…

  26. But understanding the travellers allows much better decision making…

  27. Thank you! m1nd-set.com

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