Cruise Retail
Consumer trends and appetite to spend – the outlook for cruise retail
Speakers from the cruise industry ‘Trinity’ of cruiseline, concessionaire and brand representative offered an upbeat view of the way ahead for cruise retail at Seatrade Cruise Global 2023.
The outlook for the US$2 billion cruise retail sector is stronger than it has ever been, as new ships and many new and upgraded shopping areas come on-stream. That was the upbeat message at a special session on 29 March devoted to retail at Seatrade Cruise Global, the premier annual gathering of the cruise industry worldwide. Seatrade partnered with The Moodie Davitt Report to host the session during its 2023 event (27-30 March) at the Broward County Convention Center in Fort Lauderdale, USA.
Speakers in the retail programme included Carnival Cruise Line Vice President Guest Commerce & Onboard Revenue Luis Terife, Starboard President & CEO Lisa Bauer and Seth Weisser, CEO of fast-growing vintage luxury seller What Goes Around Comes Around. The session was chaired by The Moodie Davitt Report President Dermot Davitt.
Capturing the mood in cruise: The Moodie Davitt Report President Dermot Davitt (left) with Carnival Cruise Line Vice President Guest Commerce & Onboard Revenue Luis Terife, Starboard President & CEO Lisa Bauer and What Goes Around Comes Around CEO Seth Weisser
Themes addressed by the panel included how cruiselines and their retail partners see the role of retail in the travel recovery phase, who the new cruise consumer is and what motivates them to shop onboard, and how the assortment should be adapted to their evolving needs. Key consumer drivers such as sustainability and digitalisation featured high on the agenda.
Opening the session, Davitt said: “This sector within the cruise business plays such a vital role in terms of the guest experience and in terms of revenue generation. We aim to reflect the growing importance of retailing to cruiselines – with retail becoming more and more integrated into the wider experience.”
Seatrade Retail Ambassador Nadine Heubel (left) addressed some of the opportunities and challenges facing cruise as the session began at the Cruising Innovations Theater
Addressing the role of retail before the discussion began, Seatrade Retail Ambassador Nadine Heubel (who is also Newmark Senior Managing Director Travel Retail North America & Global Wholesale) said: “Average passenger numbers on ships have been constantly increasing, spaces dedicated to retail have been increasing as well and so have guest expectations towards the retail offer. While maybe even only ten years ago, guests could be satisfied and revenue maximised with great promotional deals only, in today’s world this is far from enough.
“The cruise ships of today outdo each other with amazing entertainment options, fabulous specialty dining options featuring celebrity chefs, and the latest in-cabin technologies. To continue being relevant for the cruise guest, retail has to keep up with these developments.
“The more space retail occupies on a cruise ship and the higher our share of onboard revenue will be, the more the satisfaction with the retail offer will influence the overall net promoter score of the cruise guest – a KPI which is so important to the cruise line industry.
“To achieve ultimate guest satisfaction, no party of the value chain can do it alone. If we want the guest to win, all in the industry ‘Trinity’ have to win – cruiselines, retailers and vendors.”
Assessing where the industry is on the path to recovery, Luis Terife said: “Last year saw a strong recovery and this year is even stronger. 2023 should be even better than 2019, which was itself a high mark for us. We have more guests, we have seen significant engagement from guests onboard with the activities, promotions and products that we sell, and we are seeing double-digit sales growth on a per passenger basis compared to 2019. With that willingness to buy, willingness to engage in the experience we couldn’t be happier.”
Terife also said that supply chain challenges for the retail sector had been improving.
Premium logoed merchandise is a fast-growing category with more room to grow, noted speakers (Carnival Celebration pictured)
“We had significant out of stock challenges last year and some categories are still challenging, but each month it has got better. We have found ways with the partners to find the products that we need to sell onboard. We need to make sure that the products are the right products, and that they get there in time for loading. What we have seen over the past three to four months is that we are now getting the right products, through the brands and our concession partners.”
On the new cruise guest, Terife added: “People today want experience, location, convenience and they want premium spaces. With all of our new ship classes we are adding spaces that live up those expectations – so we can add immerse them into the experience of the brands that we offer onboard.”
As reported, Starboard has revealed a refreshed brand identity under the banner, ‘Curate a Vibrant World’.
Lisa Bauer said: “During COVID, our leadership teams spent quite a bit of time working on our ‘North Star’, and where we landed was around the idea of how you curate and bring together a great guest experience, one that is very different by cruiseline brand. The work released in the last couple of weeks is a natural extension of that with its vibrant colouring and using the sunburst as our icon. This is really about bringing our ‘North Star’ to life for our employees, for our guests and for our vendors.”
Importantly, the rebrand chimes with the optimism that Starboard sees ahead for the cruise sector.
Bauer added: “This industry is so resilient and has had to be through many challenges. But I don’t want our people to look back to 2019. Let’s look through the windshield, not the rearview mirror.
“Through 2027 we are forecasting as an industry a +45% increase in in guests, which is huge, with 75 new ships coming. So that should give us all a reason for optimism.”
Offering the brand perspective, Seth Weisser outlined the journey of What Goes Around Comes Around from a single vintage store in New York as early as 1993 to a fast-growing concept today.
“Pre-owned has become a buzzword for the consumer experience today. We were originally in brick and mortar stores, then worked with the traditional retailers, and in 2019 we began to speak to Lisa and Starboard about the idea of trying to test this in the cruise industry.
“It was out of the box but the response was amazing. I think that is because the consumer on the ships is looking for a differentiated experience. We offer the brands they always wanted but never expected to find on a cruise ship. Partially the allure of vintage is the hunt and the finding of something unexpected, and now you can do that onboard. The consumer has something they want to spend their money on, it works for the brands, and it has become a perfect marriage for us.”
The Starboard rebranding captured in video (click to play)
New consumers, fresh trends
On the consumer demographics to which What Goes Around Comes Around appeals, Weisser said: “It ranges from the person buying their first bag, at under US$2,000, to a more advanced customer who has multiple pieces, or even going as far as the collector. This is where we work very closely with the team at Starboard to analyse the demographics, the demand on the ships, and then bring it back to make sure that we are covering all the bases. So each of those customers is expiring, excited about the experience.”
Addressing the appetite to purchase today and the keys to unlocking further growth, Terife said: “It is about product, location and experience. As long as you create the right value proposition and value equation, people will buy.
“This is about what you are offering, how you activate it – critical as on a cruise shop you have an eco-system of activations each week – how you engage with the guests and also how the team is actually bringing the product and the brand into the experience.”
Bauer added: “We took a step back here and said, not everyone will want to buy a US$5,000 bag but equally not everyone wants a ‘two for US$20’ t-shirt.
“We crafted a strategy across each category and each cruiseline partner that was really around good, better, best. That means fulfilling demand for entry level to aspirational, rather than focusing on product and category.
“We really tried to look through the eyes of the consumer. In terms of trends, one is certainly leaning into the cruiselines loyalty programme, and reinventing logoed merchandise. Logo is something that the guests wear as badges of honour that represent the loyalty they have to our great cruise partners. We have really doubled down on that and seen tremendous growth in that category.
“I would also say destination is important. People want to take home memories, which leads into itinerary gifts, and mementos of where they are sailing. How do find those local artisans that can talk about their products? That also connects to sustainability – in terms of preserving local culture – and of course sustainability is something that is very, very important to guests. We are seeing those categories have a strong place where the guest is leaning in. And the more you up your game here, the more they are willing to spend.”
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What Goes Around Comes Around: Aiming to elevate traditional vintage shopping into a high-fashion experience across its store network, including in cruise
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The Moodie Davitt eZine
Issue 322 | 14 April 2023
The Moodie Davitt eZine is published 14 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 kristyn@moodiedavittreport.com