St Pancras: premium retailer destination.
It certainly seems that businesses with stores in travel
locations are getting a few things right. One factor is that they have to deal
with limited space, which they must sweat. This means being very selective
about the products what earns the right to that space.
It is therefore critically important that these retailers
know intimately the travel customer, both business and leisure – what they need
on the move, the essentials for enhancing their travel experience and the nice-to-haves,
which put people in the holiday mood.
All of this has to be managed with
military precision – there is little storage space in travel locations and
delivery times are restricted so the supply chain infrastructures have to be
more responsive than for other stores. The typical travel retailer can replace
a product on the shelf in 9-to-16 hours. This compares with the supermarkets
who achieve between 12-24 hours.
Successful travel retailers often have a separate
division within the group to manage the nuances of the travelling customer and
do it very well – you could argue that the WH Smith travel division delivers
results its high street equivalent would be very proud to replicate. As an example of this flexibility you only
have to look at their new concept store ‘The London News Company’ – the first
of its kind is located at Gatwick airport.
London News Company: news from WH Smith.
Given the results of this sort of laser-guided thinking I
would argue all retail formats could learn from this approach – it’s not rocket
science, it’s just good old-fashioned retail detail! Really getting under the
skin of what the customer needs and wants, make every product earns its right
to space, imagine the supply chain has to deal with the constraints of no space,
and most of all create the experience which is right for the needs of the
customer at the time they are shopping.
While it could be said that some of the success of travel
retail is down to the increasing levels of footfall going through transport
hubs – this is the case at both rail stations and airports. It is my belief that
it is mainly down to a laser focus and bringing really targeted ranges and
experiences to the travelling customer.
Maybe one of the drivers of success in these stores is
the competition to gain leases – any failure to deliver strong revenues will
likely see a retailer replaced as there is no shortage of merchants ready to replace
poor performing incumbents.
And the beauty of gaining a unit in travel locations is
that there will be little competition as there will only be one retailer in
each category present. Once you are in the door then expect little direct
competition from rivals.
Another less obvious benefit is the potential to leverage
travel retail into an overseas presence. If retailers start moving into
overseas travel locations then it is a soft landing into a broader expansion
within international markets.
Many retailers do not see this as an expansion
opportunity, but they should. As an opening gambit into new markets it provides
a great springboard for expanding into traditional retail locations.
Watermark: the French arrive at King's Cross station.
Maybe we are starting to see this happening in the UK at
King’s Cross station for example the French book retailer Watermark (owned by
LS Travel Retail) has opened its first outlet in this country.
If you fancy a foray into China and have a model for a travel
retail proposition then it is a great opportunity. Consider that around 90 new
airports are planned for the country (it’s the same story around the rest of
Asia). And then the rest of the country is a retailers’ expansionary oyster.
So maybe some of UK retailers’ best performing stores
won’t be limited to the likes of St Pancras station in London but will be found
in Chinese airports in the near future.
Sponsored column
by Sarah Wilson, retail specialist at consultancy Egremont Group
Posts
No comments:
Post a Comment