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
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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
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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
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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