“The best shopping experience at sea”

The high-class shopping environment and offer onboard Carnival Horizon is a “milestone” for the cruise retail business – and a key moment for how Carnival Cruise Line seeks to engage its guests.

Speaking to Vice President of Retail Services William Butler, the sense of excitement and pride quickly becomes clear. So too does the time and complexity that planning such a vast ship entails.

Butler says: “We take a very different approach to 20 years ago, when cruise lines would just add retail to the planning of a new ship and figure the merchandise would simply sell. Now the assortment is driven by guest feedback. We do a lot of guest research and focus groups, and talk to past guests who bought and those who did not buy, to decide what will work and what will not.

“It takes around three years to build a ship and over the past 18 months we have been working with our partner Starboard on space layouts and the brands that would make most sense onboard. It takes both of us to plan the full build-out. Because the shops are at the heart of the ship, it needed to be the right mix, around the central atrium, and Starboard has executed that very well.”

With Starboard (see previous interview), Carnival has positioned shopping as an integrated element of the overall entertainment programme.

“We’ve had retail onboard for 30 years but that tailored approach where retail is tied into the ship experience is one we’ve spent a lot more time on planning recently. Cruise retail is different to mall or airport retail in that you interact with the guests through different events and activities. You encourage them to return, whether they buy each time or not. Onboard Horizon, the adjacencies also work in one organised environment.”

“Then there is fine jewellery. For this category you have to have a great environment and the best specialists to present products that will last a lifetime for the guest.”

The mix is broad, with products across the categories from entry level to super-premium. Luxury plays more of a role today than it ever did, but what is critical is that the environment does not become forbidding.

Butler says: “We recognise that there are people onboard who want luxury items, but as we introduce more aspirational brands we want the traveller to come onboard and feel that the core of classic, entry level staples still exists.

Progress through partnership

Building the assortment and creating a buzz around it comes down to the relationship with the concessionaire, and here the Starboard partnership is a key one for Carnival; they recently struck a multi-year agreement for nine of the cruise line’s ships.

“On Horizon there is investment together,” says Butler. “Long gone are the days when it was about landlord and tenant. We are partners and the fact that we awarded them our newest ship tells a lot about our commitment, and theirs.”

Carnival works with five retail partners across its fleet, among them Dufry and Heinemann. Butler acknowledges the recent cut and thrust among concessionaires – sharpening price competitiveness and adding potential new ideas – but hails what Starboard brings to the table.

“Ultimately Starboard is our longest standing partner and we trusted them with our newest vessel. We have worked with Starboard for around 30 years, long before we knew what to do with retail ourselves. Today, with my team in Miami, we like to think of ourselves as retail experts too. We rely heavily on Starboard for the assortment, but when it comes to the strategy and planning, we have to do that together. And that has been a strong formula for us.

“On other ships, each partner brings different strengths and we do a lot of deep dives to gauge what they can do. When we decided to work with new partners it was to see what we could do differently and was an opportunity to try new things. At the foundation of the relationship with each of them is to create the assortment that the guests want.

“We share best practice too. When Carnival Horizon was launched we invited all of our retail partners to the inaugural event. So they each bring something. But Starboard has shown with this beautiful new environment what they can really do with a high level of excellence.”

The competition for concessions will only intensify with the launch of new ships, and as older ships are remodelled.

Butler notes: “In the past 18 months we have remodelled ten retail environments across our fleet. Our most recent was Carnival Legend (a Starboard client ship), which sailed out of Seattle around Alaska but will be repositioned in Australia after the season. It’s a beautiful new environment that resembles what we have done onboard Carnival Horizon.

“We’re also building Carnival Panorama, the third in the same class as Horizon and Vista. She will launch in November 2019, based out of Long Beach, California. We have yet to award that contract, and are deciding how to curate that offer.”

Beyond this, Carnival is planning its two biggest ships yet, one for 2020 and another for 2022. The first, with the working title ‘XL’, will house 6,000 passengers and have retail over three decks, rather than two as on Horizon. Butler says: “This will be a new shopping environment, it will be fully embedded into the guest experience and will become our largest retail experience at sea.” A retail partner has yet to be named but, as Butler noted of the Horizon planning, lead times are lengthy.

“We first determine which category of business will be placed where onboard, well ahead of time, and work on which brands fit the space after that. We have to make decisions on brands almost a year in advance of launch, which can be a challenge. We need to have brands that resonate with the guests. With Horizon we’ll assess how those brands are doing onboard and potentially then extend the best of them to new ships or even refits of our older ships.”

As Carnival plots its course towards a new era of larger ships with greater retail spaces, Butler is confident about the prospects for the business.

“Retail has long been a strong contributor to our onboard revenue, but because we’re listening to our guests we are now adding merchandise that is meaningful, adds value to them and is tax & duty free of course. I’m proud that we see healthy growth in retail, and if we have the right offering we’ll continue to see growth.

“What is exciting is that we are just getting started. At the end of the day we want people to say that they found a great memento of their trip, and had a great deal too.”