The face of travel retail is changing. For decades, brands and travel retailers have relied on shiny product display shelves and a steady stream of travellers armed with long duty-free shopping lists as their winning formula.
However, this tried-and-tested formula no longer works in the digital age.
SK-II global chief executive officer Sandeep Seth explains: “Digital technology has become an essential part of our everyday lives. We need to look at how we can leverage technology to improve the buying experience for customers, especially time-pressed travellers.”
Adds Han In-gyu, CEO of The Shilla Duty Free, “Many of our customers are in their 20s and 30s, and very comfortable in a digital environment. This signals the need to introduce digital touchpoints that create a more meaningful shopping experience at the airport for them.”
The spokespersons for the global beauty brand and travel retailer were speaking in a joint interview on the side lines of the TFWA Asia Pacific Conference 2019, which was held at the Marina Bay Sands Expo & Convention Centre from May 12 to 16.
Travel retail store of the future
The Future X Smart Store by SK-II and The Shilla Duty Free was among the various travel retail innovations on display at the five-day conference.
Launched at Changi Airport in April, the store is designed with travellers in mind, boasting a unique “phygital” retail concept, which merges physical in-store elements with cutting-edge digital technologies. It is equipped with features such as an interactive station with a touchscreen function that provides travellers with information about SK-II’s products, and helps them locate the specific products they are looking for in the store.
There is also a smart scanner with image-recognition technology that enables travellers to scan pictures of their desired products from their mobile devices to locate them instantly.
Understanding tomorrow’s traveller
With the Future X Smart Store leveraging some of the industry’s most advanced technologies, it is little wonder that it has been dubbed the world’s first travel retail beauty smart store.
Mr Seth, however, is quick to note that customer needs, and not brand competition, are the driving force behind SK-II’s travel retail innovations.
“It’s not just about technology. If you look at travellers, there are many considerations that a digital experience can help with. Firstly, the customer has limited time. She wants to purchase an SK-II product as quickly as possible. Secondly, many customers come armed with a shopping list on their mobile phones, so we need to enable them to leverage that technology seamlessly in the store,” he says.
Various iterations of the Future X Smart Store have been launched in non-travel retail spaces in cities such as Tokyo, Shanghai and Singapore. Each store has varying technologies such as skin analysis booths and skin scans that are helmed by artificial intelligence, depending on the environment and customers’ shopping habits.
In Singapore, the smart store at Changi Airport specifically caters to customers who are strapped for time, or have little awareness about SK-II’s products but are shopping for gifts.
Strong partnerships in travel retail
So far, efforts to push the new “phygital” shopping concept of the travel retail smart store have reaped rewards with positive feedback from customers.
Mr Seth acknowledges that the brand could not have achieved this success alone.
“Transforming the travel beauty experience is a massive undertaking that requires collaboration between brands and travel retailers. Both SK-II and The Shilla Duty Free share the common objective of driving positive change in the lives of shoppers, which made the Future X Smart Store in Changi Airport possible,” he says.
Mr Han adds that such collaborations enable brands and airport retailers to glean important insights from one another, thus creating opportunities for fresh perspectives and deeper learning.
“Retailers have data about how customers shop and behave. When we share this information with brands, they can capitalise on it by improving their products and brand experiences. This in turn attracts more travellers, so it’s a closed loop that benefits everyone — brand, retailer and, most importantly, customer,” he explains.