ANALYZING CONSUMER BEHAVIOR IN

TRAVEL RETAIL Consumer Behavior Assignment

Section B

Ankit Goel 6B

Faisal Jamal 20B

Piyush K Singh 34B

Simpi Patel 48B

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ANALYZING CONSUMER BEHAVIOR IN TRAVEL RETAIL

1. Introduction

Travel retailing has been highlighted as one of the fastest growing niche retail markets, delivering

outstanding prospects for growth over the next five years. The Duty Free market is also commonly

called the tax free market imposed by government entities. In essence, companies import goods

and sell them to consumers who are leaving the country, who are not charged a tax on these items.

Duty Free products are found at international airports, ports, cruise ships, border towns, on-board

international flights and some downtown stores as well.

The travel retail in the airports started from a small area of gifts for tourists going back home,

developing into the construction of huge malls within airports. The airport profits are consequently

incredibly higher thanks to retailers. Many companies have started to look at the Duty Free market

as an opportunity for success and relative expansion of their business: this phenomenon is

particularly appealing in the fashion industry.

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2. Scope of Study

For the purpose of this study, we have focused on travel retail on airports in the high end fashion

category that has players including Dior, Lancme, Chanel, Estee lauder etc. To gain insights about the

high end travel customer we conducted primary research at high end fashion stores in the city as well as

performed automated text mining on the Internet to analyze reviews. With airport income from landing

fees and passenger charges has been squeezed by regulators and budget airlines they have responded

by boosting non-aeronautical income, a big part of which is their cut of sales in shops. Travel retail has

already grown faster than the traffic over the last 10 years. In the past the business was limited to a few

multi-category stores around the boarding gates. Airports have become big shopping malls surrounded

by boarding gates. Passengers are invited to cross the shops to arrive at the departure gate. In

particular, this concerns the creation of an efficient layout optimizing the orientation of customers

in pre-boarding areas. This efficient routing contributes to create a relaxed atmosphere and

increases the probability of purchases. A qualitative and unique offer emerges to be another

necessary factor for travel retailers, linked to an attentive customer service aiming at providing a

superior purchasing experience for passengers. Offer, Customer Service and Atmosphere are the

factors explored in this study. The perception of customers concerning atmosphere, offer and

customer service will be investigated, in order to understand whether it is in line with the message

and the purpose companies want to communicate.

3. Results

4% 9%

57%

30%

Annual Income

Upto INR 300000

INR 300000-500000

INR 500000-1000000

Above INR1000000

52%

29%

16%

3%

Reason for Travel

Leisure Business VFR Others

3

The largest

43%

18%

39%

Price Perception

Very Expensive Same Price as Malls

Less Expensive

56% 33%

11%

Importance of trial before purchase

very important

important

not thatimportant

8%

22%

44%

26%

Frequency of shopping at airports

Never

rarely

Sometimes

Mostly

32%

7%

12% 15%

34%

Motivation behind purchase

time

cost

environment

offers

souvenirs

0%

10%

20%

30%

40%

50%

60%

70%

Cosmeticsand

Perfumes

Food andBeverages

Electronics Clothes andFashion

Accessories

Books andMagazines

Souveniersand Gifts

Others

What do people buy

4

76%

24%

Apple store at IGI

yes

no

Ghost Question

Consumers were asked for a recall of Apple store

at the IGI airport. We wanted to check the

perception of consumers towards the presence of

high end outlets at the airport, incidentally 76%

people responded recalling the presence of Apple

store at IGI airport, which in reality is not there,

leading to the insight that the luxury purchase

has a cognitive connect with the travel retail

customer.

The proportion of people travel for leisure purposes followed by business. Given the higher

discretionary spending on such trips and given those consumers at airports show a high median

income, luxury products have a captive audience at such locations. Cosmetics and perfumes, food

and beverages and souvenirs are some of the highest category purchases. This trend is also driven

by the duty free stores offering good discounts. Hence retailers stressing on discounts stand to gain.

4. Consumer Profile

The heterogeneity of people transiting in an airport is high in comparison with downtown shopping

malls; therefore attitudes, profiles and needs of potential customers are not uniform, but rather

varying on the basis of the demand segment. In order to create a business plan, it is necessary to

understand the development potentials and the distinctive features of the different customers

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segments. We have therefore created the following segments based on our study.

4.1 Major Insights Airport shoppers may have higher stress levels due to travel anxieties and unfamiliarity with the airport.

Also, the customer demographic in the airport is more affluent than at malls due to the influx of

business and international travelers. Most specialty retail purchases at airports are not planned

expenditures; the majority of purchases are based on impulse. Streamlining your presentation sends a

nonverbal signal to time-constrained travelers that lets them know they have ample time to select,

purchase and be on their way.

0 10 20 30 40

Time Constraint

Unfamiliarity

Variety

Others

No.of Respondents

Reasons for not shopping at the airports

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For most of the respondents time constraint followed by unfamiliarity at the airport remain a major

deterrent for shopping at the airport.

5. The Atmosphere in Transitory Phase

There are several environmental stimuli affecting the consumers purchasing decision. The perception of

the airports atmosphere is one of the main factors influencing the motivation of customers.

Walkthrough has become a path to guide passengers from the airport entrance to the gate: right after

the boarding or the security checks, passengers find the shopping area .In order to take full advantage of

sales in airport shopping, nowadays, it is important to grant passengers the opportunity to relax, giving

them new time and space dimension and a new meaning to the time spent in the shopping areas.

Respondents had a good recall for the advertisements on the Boarding pass, Digital displays and Backlit

Diorama.

6. Consumer Behavior and Company Strategy

Marketing and other stimuli affect and enter in the customers black box, which generates some

responses. The marketing stimuli comprise the components of the traditional marketing mix and other

environmental stimuli: they influence therefore the components of the black box and emerge in buyers

responses and purchasing decisions. However, consumers decision is also affected by a great number of

factors which might be external or internal, such as culture, social class, family, status, age, occupation,

lifestyle, personality, learning, beliefs, attitudes, motivation and perception.

0

10

20

30

40

50

BoradingPass(Backside)

Hoardings/Banner

Digital DisplayBacklit Diorama

Other

No. of Respondents

Ad

vert

ise

me

nt

Re

call

for

dif

fere

nt

fo

rmat

s

Demographics

Location: IGI Airport & Mall Stores

Sample Size : 45

Male: 36% Female: 64%

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7. A typical AIDA model exhibited by consumers

Concerning the service, it is absolutely vital to properly select personnel since they are the people

that assist travelers before, during and after the purchase. It is even more important to satisfy

customer desires while also assuring them that they are buying the trendiest products

8. Conclusion

In order to create a balanced strategic planning in travel retail, a company needs to consider

different variables to be competitive on the ever changing market: customer characteristics which

affect the most their purchasing behavior, the creation of a proper atmosphere, also through a

collaborative dialogue with the airport and a targeted offer in order to be able to satisfy the right

category of passengers with a proper combination of products features. The proper customer

service as well is extremely necessary to complete the offer to travelers

0 5 10 15 20 25 30

Friends and relatives

Advertisements

Internet

Others

The stunning photographs

hold my attention.

I read about the product and look

at the photograph

again.

I want to look like that too.

Ill check out the store to see if they can help

me with it.

Sources of Recommendations

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Questionnaire

1. How frequently you shop at airports?

Never

Rarely

Sometimes

Mostly

2. What is your annual income?

Less than 3 Lacs

3-5 Lacs

5-10 Lacs

More than 10 lacs

3. What is the most important reason for travel?

Leisure

Business purpose

Visiting friends and relatives

Others

4. How much time do you take before deciding on an unplanned product purchase?

Less than 15 minutes

15 to 45 minutes

45 to 60 minutes

More than 60 minutes

5. What do you remember at the major source of information at airports?

Boarding pass

Hoarding/Banners

Digital display

Backlit diorama

6. How do you perceive the pricing of products at airports in comparison to malls?

Very Expensive

Same price as Malls

Less expensive

7. How much important is the trial before purchase of products?

Very Important

9

Important

Not that important

8. What have you bought at airport?

Cosmetics/Perfumes

Electronics

Food and Beverages

Clothes

Books/Magazines

Others

9. What categories of product do you remember are available at the airport?

Cosmetics/Perfumes

Electronics

Food and Beverages

Clothes

Books/Magazines

Others

10. What is the motivation behind making a purchase at the airport?

Time

Cost

Environment

Offers

Souvenirs

11. What is the reason for not shopping at the airport?

Time constraints

Variety

Familiarity

Others

12. Do you remember the Apple Store at the IGI airport?

Yes

No