Unlocking a new world of loyalty
Breaking through digital boundaries
Welcome to the latest in a series of explainers by marketing, brand activation and customer experience specialist CircleSquare, this time focusing on loyalty in travel retail.
As we prepare to see friends old and new at our first full TFWA in three years, we asked clients and partners what this year’s theme, New World, meant for them. Obviously the promise of a new start for travel retail ranks very high, but one word kept on coming back in our conversations: loyalty.
Travel retail is indeed in dire need of a reinvention, and loyalty might just be the key to unlock it. We have written extensively on the subject in the past 18 months, so rather than re-inventing the wheel, here is a piece we published a year ago in The Moodie Davitt Report – which interestingly is now more than even relevant.
What about Travel Retail?
Travel retail has traditionally been an industry where customer engagement happens at the physical point of sale, starting after passport control, or slightly earlier if we include OOH advertising. The specific nuances of travel retail – the difficulty in knowing where customers are from and where they are going, and the steady year-on-year passenger growth – did nothing to foster innovation in the industry, particularly when it came to engaging with customers.
But the pandemic hit and changed everything. Fewer people traveling means it has become essential to work on conversion rates in order to generate sales, and therefore engage with potential customers before they started their journey.
The bigger picture is that travel retail was forced into its own digital transformation. And it is fascinating to see, particularly as it is a huge industry – the 6th continent as it has been famously called by L’Oréal. This digital transformation is happening in front of our very eyes, and it creates huge opportunities for those who can identify them.
Take the travel retail market in Hainan as an example. It has departed from the traditional travel retail activation canvas and is now flourishing with new, integrated retail experiences. Unsurprisingly, this is one of the only places in the world where travel retail is booming and the specificities of this on-shore market make it an ideal test bed for brands to experiment.
We are starting to see activations that include paid digital media to engage with customers while they’re still at home, KOL driven content, VIP events, and a digitalisation and gamification of physical retail.
Kiehl’s Travel Retail Asia Pacific June activation in Hainan, including a digital platform linked to indoor and outdoor pop-ups (link).
While it’s great to see brands starting to experiment with new touchpoints in travel retail, it is hard not to notice that in most cases these campaigns lack a form of integration. Historically, all touchpoints have been planned in silos and rarely work together as a single narrative that spans the customer’s entire brand experience. It is essentially lacking that special ‘red thread’ that takes customers on a personalised journey.
The Connected Traveller Journey
So how exactly does anyone piece all these touchpoint together and turn them into a single personalised journey? That’s where we come in. We have identified the five essential, core steps required in what we call The Connected Traveller Journey:
1. Pre-trip engagement
Social media is emerging as a core driver of awareness and it is increasingly becoming the first touch point on the customer journey. Indeed, a targeted media strategy allows brands to reach potential customers before they travel, at a time when they are planning their purchases.
However, a clear social media strategy is not a silver bullet. Reaching the right people at the right time in their journey is very valuable but the message needs to be meaningful. Hence the importance of a personalised and engaging story along the entire customer journey - in other words, a strong content strategy – to maximise customer acquisition and progression along the journey.
2. O+O platform
Once customers are engaged, it is important for brands to have a dedicated digital platform that acts as a personalised content delivery platform (with the brand controlling the content and the level of personalisation) and central data collection platform to ensure we can gather data from the digital AND the physical touchpoints in order to drive loyalty.
3. Drive to store
A dedicated platform also enables brands to redirect traffic to the most relevant locations based on customer’s individual journeys, whether this is e-com for replenishment, VIP events for affluents prospects or an outpost for travellers hungry for new experiences. This, in turn, ensures that the brand maximises conversion rates.
4. In-store touchpoint
Integrating a customer-centric strategy also has an impact on store design. It allows for more personalised in-store experiences and service for customers, and invariably increases the store efficiency and data gathering.
5. Post-trip Loyalty
Loyalty has always been a difficult one to crack in travel retail. Data gathered along the journey can be used to refine customer personas and the targeting of future campaigns, but at an individual level, loyalty is complicated. The simple reason: frequency of travel.
So why not give an additional definition to the word omnichannel? It does not have to be only about merging online and offline experiences, it can also mean taking a customer-centric approach to travel, and merge a travel retail and local market customer experience.
The power of three: Estée Lauder, CDFG and Marriott Bonvoy partner for blockbuster Summer shopping campaign (link).
Travel retail as a recruitment channel for domestic markets
A huge opportunity exists to completely redefine travel retail – move from a view of a channel defined by sales to a channel defined by customers, or more specifically, the travellers.
Travel retail is the perfect channel to introduce new brands and products to customers who are in the right mindset. But looking at a journey from a customer’s perspective, why should it stop when they get back home?
Travel retail and local markets have their many differences, not to mention competing interests and different P&Ls. But by taking a customer-centric approach to customer journeys and by integrating a digital platform that acts as a central data collection hub along the entire customer journey, online and offline, we end up with a very valuable currency: data.
Data is not only valuable negotiating power with local markets, it also enables an entirely new dynamic. Brands don’t have to look at the ROI of their activations form the perspective of the sales during a one month promotion, but instead can look at a customer acquisition costs based on the lifetime value of a customer.
In the midst of travel retail’s digital transformation, there is a once-in-a-generation opportunity for travel retail to redefine itself as a recruitment channel, and a revenue driver, for local market.
We would love your feedback and to initiate a dialogue with you. You can reach us on this topic or any other here: getintouch@circle-square.com
*About Circle Square
If you want to create deeper connections between your brand and your customers, CircleSquare, with its global network of creative studios, is uniquely placed to help you develop integrated strategies for customer acquisition, conversion and loyalty.
CircleSquare has offices in nine global locations including London, Paris, Dubai, Singapore and Hong Kong, covering every phase of the customer journey from strategy and creative to design and delivery.
CircleSquare’s in-depth understanding of global travel retail has earned it an impressive client list, including LVMH, Richemont, L’Oréal, Mondelez, Lacoste and Diageo, alongside retailers like Gebr. Heinemann, Dufry and DFS.
Contact: Managing Partner Stephane Zermatten at Stephane.Zermatten@circle-square.com
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The Moodie Davitt eZine Issue 315 | 1 October 2022
The Moodie Davitt eZine is published 15 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail sinead@moodiedavittreport.com