Sustainability to the fore

The panellists also discussed the sustainability journey that cruiselines and their partners are, on and what that means for retail.

Lisa Bauer said: “Specific to retail we have developed some great partnerships, for example introducing luxury vintage with Seth and his team at What Goes Around Comes Around, or with some of those jewellery manufacturers who are taking plastic out of the oceans. That also extends to the search for diversity with our partners, for example female-led businesses. When we choose product one of the filters we run everything through is sustainability.

“When we launched on Carnival Celebration we did it without any plastic bags and encouraged guests to buy reusable bags. Sustainability has a seat at the table every time we are curating products.”

Terife added that Carnival has been building momentum around sustainable practices for years. “We have not had single-use plastic since 2018. We also talk about the materials and how we source, and my team is doing a great job on this on the shoreside retail. We need a clear story. Sustainability is key in every aspect of our ecosystem. And we want to be clear that retail is at the forefront of the way that we sell from products to the use of materials.

With vintage luxury a recycled product sector, Weisser said that his company and category was akin to a “poster child” for sustainable practices.

“When you look at Gen Z and the Millennials and their dislike of disposable fashion, you see that buying quality over quantity is the new reality for the consumer. We are carrying the highest brands and goods that are made in the world, these become heirlooms and things that can be resold or passed down. And these products really embrace the idea of circularity and that is something, with the high quality of these goods, that the consumer wants to commit to.

“That has now crossed over not just those into generations, but to their parents, and the older generations who are looking at the same realities that their children are speaking to. They are transitioning their consumer thinking too and that can be the consumer pattern for the future. The new generation is becoming the top level consumer, they are becoming the bigger part of the sales funnel, and this is going to be a snowball that inevitably takes over the mountain.”

The speakers also addressed how they see the future for store formats and the key product categories of today and those that might emerge tomorrow.

Bauer said: “I’m particularly excited about the idea of pop-ups and pop-ins, and the ability to test and learn. If it works, scale it and if it doesn’t, take it off the ships. It’s part of changing the mindset around, not to create a marketplace with all this product, but instead seeing it through the lens of the consumer. So if you are going to do a pop-up, why not do it about beach essentials, or do it around a night out, or gifting, or leaning into the destination. Then you are thinking about it through the eyes of the consumer, versus just putting on an event. So the idea of pop-ups is important.

“With logo, we have just scratched the surface. We just hired some more in-house development to expand in that area. As we have talked about, sustainable products are really growing and destination is also key. All of those alongside the evergreen categories that we carry and will continue to develop.”

The people challenge

For cruiselines as in other industries, certainly those with a retail component, staffing has been a big challenge as the recovery has gathered pace.

Elaborating on the impact for Carnival, Terife said: “The staff challenge is a combination of things. One, some people decided to stay at home and do something different, and two, we are adding capacity that needs to be served. We have 24 ships and will add another three in the coming year.

“The cruise industry is back stronger than before. Now we need to bring in staff and make sure that we are recruiting the right staff, those that can do sales on a cruiseline but also sales on a specific brand.

“For us, staff is not only about knowing your brand or about being premium, but they also have to be fun, engaging and create a good experience and environment. The training needs to reinforce that connection. And the other angle is that we are treating staff how we want them to treat the guests.

“There was a big push in cruiselines even before the pandemic about how we should be treating the shipboard personnel, how we are engaged, providing feedback, and in making them happy. That way they can provide the right experience.

“We talk about the digital experience as an important tool in the sales process. But there is a one on one connection with a person that you can never substitute. If I’m a team member working on the front line, I’m the one closing the sale. I’m the one that needs to know who you are, what is your interest and I’m the one providing the service and the value to the guest.”

Bauer agreed that the past years have been tough but that there remain opportunities for the right people. “We hired 2,000 people last year and that means training, and continuous training. The favourite part of my job is going out and visiting the ships and talking to our teams, many of whom have been with us five years, ten years, 12 years, 15 years. And it’s because they feel like they’re part of the family and they are treated incredibly well by our cruiseline partners. Let’s face it, it is a very hard job to be away from your family and your friends for six months at a time.

“Another element that I believe in is showing them a career path so they can move up from a sales associate to an associate manager to a retail manager and also shoreside. We want people that want to move up in their careers and can see the opportunity to do that. We have a huge focus on identifying our top talent.

“I have always said that ships are just steel and glass without the people. The insights that our employees have about the guests are so valuable. They tell us what the guests are asking for that we don’t offer, and it’s amazing how quickly we can react in so many areas based on their feedback.”

To the question of brand commitment to the channel – when some have questioned the value of cruise – Terife said: “I can only talk about the Carnival guests but there is an absolute willingness to buy with the right product and proposition. We see the data. So I am very happy to sit down with anyone to remove any myths about cruisers and about Carnival because what I am seeing is growth. We are seeing a strong demand for products across the range from entry points to premium luxury. And the growth is here to stay.”

Bauer added: “We are on a campaign to get our important vendors onboard ships. Many of our really significant vendors have never set foot on a ship. We are trying to host them all the time because they are mesmerised once we get them onboard and it dispels any perceptions they had of the environment or the customer.

“So for our industry the number one opportunity is to get people on board and see how incredible the experience is. Also, we respect the brands tremendously and how they want to be brought to life. If a branded build-out is required or if certain training is required, we absolutely will partner with the brands to do that.

“A lot of categories that would never have been imagined on cruise ships, like vintage luxury, are coming forward now. We are trying to look at what other up and coming experiences or brands we should bring on. We still have a lot of educating to do in the cruiseline industry to get brands to see us in a different way. And I asking for everybody’s help on that.

Bauer added: “One of the things that we want to do a lot more is have meetings as a Trinity, with cruiseline and brand involved alongside Starboard. It’s important that brands can articulate their expectations directly as can the cruise partners. Sometimes I think things get lost in the translation and we hear that that a particular brand doesn’t want to come onboard. It’s not because they don’t like the guest. It could be because we haven’t done a good job explaining the adjacencies they require, the build-out they require or other things they require. So anytime where we can sit around the table as three parties, it can be powerful.”

Terife added: “It is a really great point that on the newer ships we also have a lot more retail space, which helps brands be placed in a specific place. You want to have the right adjacency, you want to be displayed in a certain way. We, along with our concessionaires, investing capex into those relationships in the new builds and in dry dock where other ships are revitalised.

“We will always find the right way to show the experience or product and provide spaces for consultancy and for relationships between the product and the guest. We know that the right space and right experience is going to drive sales satisfaction, and at the end of the day a positive cruise experience is going to bring people back again to cruise.”

In conclusion, we asked the speakers how they view the next wave of evolution in the cruise retail sector, and what will help define the future.

Weisser said: “As a new entrant to the cruise industry, it’s pretty clear there is some thought leadership in terms of transforming what retail means on ships. Like others I had my misperceptions about what it was like until I went on a couple of ships and I had my eyes opened. We were really surprised by the consumer reaction and the fact that a differentiated luxury experience works.

“This is a blank canvas in many ways, and a chance to complete the cycle of consumer expectations and excite them. What we offer is a kind of cool factor and a luxury experience that the consumer is looking for. Every consumer wants to be a luxury consumer, whether they can afford it or not. Aspirationally they want to be in that club.

“Whether they buy or not they can go into the shop, touch these products and interact with this specialist, and they don’t feel pressured like they might when you go to the brand stores directly. So the overall experience package that we put onboard helps to elevate the overall opportunity for retail. And we are excited about where that’s going.”

Bauer said: “There are a couple of things coming towards us. One is that as we think about new builds, and we think about new spaces, the idea of having retail experiences outside the footprint of the four walls is an opportunity.

“There is no silver bullet to how we grow but it will be about making sure we have got the right product for the guests, the right employees with the right training, and that it is experiential and that we are using the data to continue to get smarter and doubling down there.

“But it’s also remembering that we are in the cruise industry, and people are on vacation. Let’s not take ourselves too seriously. It is getting back to that idea of, as we say, curating a vibrant world. And whatever trends are hot in particular areas of the world, making sure we’re agile, and that we react to them. As an industry we have sometimes left things too long once they are in place, versus continuing to reinvent and be very relevant, and to help be an even representation of what the brands stand for than in other environments. We still have some work to do, but we can get there.”

Concluding, Terife said: “To me, the aspiration should be about doubling the business size [in cruise retail]. We talk about the partnership that we have and how we can make it a win-win-win so let’s make that the intent.

“We need to make sure that the brands, our concession partners and brands are all winning. That will translate into our goal of having a higher satisfaction level from the guests, more repeat guests and more people coming and engaging with cruise. We see each other as a very strong trio.

And together is the only way we provide the product and the experience. Look at our recent double-digit growth, then imagine how fast we can go together to double the size of the business. And that is what we need to aim for.”