Welcome to the latest in a series of columns brought to you in association with CircleSquare. The marketing, brand activation and customer experience specialist is using this column to share insights and ideas that help the global travel retail industry capitalise on the opportunities that present themselves. In this edition, the CircleSquare team assesses the symbiotic equilibrium of physical and digital channels.

To say physical retail is living on borrowed time is something of an understatement. At no point in its rich and vibrant history has it been so close to being swatted aside, or perhaps more accurately annihilated, by the unstoppable march of ecommerce. We stand on the precipice of retail Armageddon. Could it possibly get any worse? Yes…simply throw a global pandemic into the mix. That’s right, the views expressed in the opening paragraph of this column are almost two years out of date. They were the opinions of the great and the good of the retail world before any of them had even the slightest idea the executioner’s axe was falling, as the world was cast into the chilling chaos of Covid-19. According to PwC, in the UK in 2020, nearly 50 shops closed permanently every single day. But even more of a surprise was how the shocking and untimely death of physical retail, as counterintuitive as it sounds, jolted it back to life.

Signs of Life

The saving grace was without doubt the unprecedented acceleration of change. Had it taken a few years for ‘physical’ to gently metamorphosise to ‘digital’ like we all believed it would, it is entirely possible physical retail might have silently faded away without us ever noticing. Instead, the pandemic caused it to be violently snatched away from us, but its sudden removal shocked us into realising how much we all still value it, and just how much human beings are ill-suited to living on a digital-only diet. It turns out that the retail we can touch, feel, taste and smell is not only alive and kicking but we’ve also realised is vital to allow digital to thrive. And what better time for us to celebrate the return of physical retail than at the very same moment we celebrate the return of the ultimate travel retail physical expo, as TFWA World Exhibition returns to Cannes? If we are honest with ourselves, however, we know that despite Cannes making its triumphant return, it will never be the same as before. Just like physical retail, the Cannes we knew and loved was yet another fatal casualty of the pandemic. When we stop for a second and realise we’ve all been looking down the wrong end of the telescope, we realise it was never about a ‘return’ but a sort of ’rebirth’; a moment of great hope and excitement, a second chance for our wonderful and resilient industry and a new era of travel retail. One with boundless possibilities.

In May, DFS Group and licence holder Shenzhen Duty Free revealed the second phase of their groundbreaking experiential store within the Times DF x DFS Haikou Mission Hills Duty-Free Complex on Hainan island. The store takes customers on a journey through key destinations around the globe, each zone dedicated to a different product category. In Paris shoppers can catch falling bubbles of luxury fragrances which burst when they touch your open hand, releasing the perfume. In Venice, shoppers feel the warmth of the morning sunshine across the gondolas and experience the aroma of freshly brewed espresso. In Sydney, a live art piece featuring a beautiful shoal of fish react with movement based upon shopper interactions and motion.

The Magic of Physical

Months of lockdowns and social distancing measures have resulted in the act of shopping becoming a desperately lonely experience. Not only are you shopping alone on your smartphone or laptop, but your only interaction with the retailer is via the soulless ecommerce platform, or, if you are lucky, an ‘AI’ chatbot which invariably doesn’t understand your needs and sends you off on an unnecessary tangent. What’s missing is the magical human component. Shoppers visit physical locations to connect with people, to discover a sense of community and to receive a personalised retail experienced. Interacting with ‘human’ store staff is not just about seeking expert advice relating to products but about engaging in a conversation, weighing up decisions together and getting a sense that your purchase truly matters in the way a ‘click’ never can. Physical shoppers enjoy the theatre of trying on clothes and posing in the mirrors, the sensation of the material upon their skin, how the light dances off the finish of the fabric and the creativity of combining different items together like a fashion designer. They enjoy browsing through the beautifully designed labels on each bottle, the unmistakable sound of a popping cork, the delicate aroma created by swirling the rich liquid around the inside of a glass, the warm, velvety mouthfeel and then closing their eyes to intensify the sensory experience whilst in the background an expert gently narrates the story of the product’s intriguing provenance. Shoppers enjoy ecommerce because of the immediacy, the ease and the accessibility it provides. Images of the products you seek, rush to your hands in an instant, supported by peer reviews, price comparisons, delivery dates and all the necessary information for you to make an informed and immediate choice. Add an item to your virtual basket and alternative choices appear, you don’t have to lug them around the store with you and should you abandon your shopping mission, you know the items will remain in the basket for when you next log-in wherever in the world that may be.

The symbiotic relationship

Just because they do different things, doesn’t mean physical retail and ecommerce are incompatible. Like Fred & Ginger, Simon & Garfunkel, Penn & Teller or Holmes & Watson, they bring out the very best in each other when they work together in harmony. A recent study in China revealed the most effective sales conversion rates in 2021 were achieved using a combination of a digital ‘teaser’ campaign and physical in-store purchases. Just imagine the impact for travel retail of paid digital media which can connect directly with a soon-to-be traveller, engage them in compelling brand story-telling, drive them into physical retail environments where they can personalise their sensorial experience based upon their digital preferences, encourage them to feel reassured by the physicality of touch and aroma, make an instant purchase without the need for queuing, which is bespoke gift-wrapped and delivered to their choice of plane seat or home address. This is no longer a fantasy; this is how today’s travel retail stores will succeed.

The new omnichannel store in Shanghai for L’Oréal Paris delivers a unique experience for shoppers as each aspect of the store in connected via WeChat, allowing each shopper’s interaction to be personalised. Upon entering the store, shoppers are handed a physical key which unlocks each product display, including an interactive bicycle which recreates the experience of cycling around the streets of Paris. At the end of the store visit, the key is returned and all the data associated with the shopper’s visit and their specific interactions are captured and used to build their own individual profile. This allows L’Oréal to provide relevant personal recommendations of products and invite shoppers to VIP events.

Successful travel retail

Delivering success in travel retail, both now and in the future, requires us to first recognise and optimise our historic strengths. Uniquely, travel retail remains the perfect channel to introduce new brands and products, immediately bestowing on them a global credibility impossible to attain in domestic retail alone. Pop-up stores are all the rage in domestic retail, providing limited-time experiences and exclusive products; when it’s gone, it’s gone. This is something we’ve been doing brilliantly in travel retail for years but because it takes time, effort and creativity, it is often the first thing to be cut when budgets look tight. It is vital this misconception is cast aside, and genuine exclusivity returns. Secondly, we need to learn from the past 18 months and embrace the happy accidents which have actually worked in our favour. Social-distancing and health precautions have transformed the way shoppers navigate a retail environment, reduce the clutter from over stocked shelves, remove the unnecessary queues and promote cashless purchases. All of these have enhanced, not hindered physical retail. Moreover, by limiting the number of shoppers who can be in store at any one time, we have inadvertently created a more intimate, and exclusive, shopping experience which has increased the desirability to enter the store. Multi-sensory and experiential engagement is back with a bang. The excited, wide-eyed wonder of shoppers, filled with the anticipation of that ‘tingle’ which only comes from a personal physical encounter which hits every nerve and awakens the human senses, as people clamour to return to the store environment to gorge on what they have been starved of since the beginning of the pandemic. Then there is sustainability. Think way beyond the token offerings we have all recently seen which appear to be little more than a marketing ploy to drum up more business. Think genuine, integrated sustainability, delivered throughout product sourcing, packaging, promotional materials, store display, experiential…not just for today either, but for the afterlife of the products, the materials and even the brand stories. Naturally the subject of sustainability is so significant, these comments can hardly do it justice and really it needs a column all by itself. Keep your eyes open as one is in the pipeline. Linking the entire shopper journey through a single digital thread, has allowed shoppers to stay connected throughout the whole shopping experience and furthermore enhance the physical experience by providing additional detail which are fun, relevant, personalised and live. Through the power of digital, brands can offer customers instant brand personalisation, making each one of them feel like their very own VIP. 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, both online and offline, the data acquired can make travel retail the perfect recruitment channel for domestic retail. As we know this continuous connection with customers is an essential tool for reinforcing strong and consistent brand narratives, which truly engenders their bond with the brand, ultimately fuelling long-term loyalty. Apply these principles to travel retail and the second coming is going to be much more spectacular than the first. If you’d like to speak to one of our experts to find out how your brand could benefit from finding the symbiotic equilibrium of physical and digital, and learn more about how CircleSquare are the perfect agency partner to help guide you through this complex new world, simply turn your telescope around and give us a call.

*About CircleSquare

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 302 | 22 October 2021

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

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