“Don’t worry about the world ending today, it’s already tomorrow in Australia.” Charles M. Schulz
Knowingly, or unknowingly, there’s a certain level of exotic convergence materialising between travel and luxury. It’s a known fact that huge changes in consumer expectations and behaviour, driven by growing digitalisation, have transformed the retail sector in the modern NewGen world.
While the tectonic move is more apparent in retail generally, the luxury retail segment cannot remain detached and has moved in this direction, too. According to a study by Bain & Company, the luxury market has been undergoing a generational shift, with 85% of luxury growth in the year 2017 fuelled by Gen Y and Gen Z.
As a result of the growing influence of the Instagram generation, luxury retailers have had to rethink their marketing and brand image management strategies.
In the years past, luxury used to be defined as extravagance, indulgence and exclusivity. However, now, experiences have become the status symbol that goods formerly used to be.
The new generation of luxury shoppers is desirous of moments and memories that are Instagrammable, the personalisation of goods and services, and experiences that are inclusive.
The travel and tourism industry
The travel and tourism industry in the Asia-Pacific and Middle East has been booming. According to the United Nations World Tourism Organization, international tourist arrivals in APAC grew 7% in 2018 to reach 348 million (revenues reaching $435 billion), around a quarter of the world’s total, and APAC tourism has been outperforming all world regions in growth in terms of international arrivals since 2005.
The Middle East has seen a 6% growth in 2018 (60 million tourist arrivals) with revenues touching $73 billion: a trend worth highlighting indeed.
The growth in the travel and tourism sectors signifies a lucrative opportunity for luxury retailers, and such a high net worth segment shows a clear infatuation for luxury brands, with clients being 7.6 times as likely to have visited Dior websites and 3.2 times as likely to have visited Burberry websites.
It’s no surprise then that we’re seeing developments such as Singapore’s Jewel Changi, a Singapore Dollars 1.7 billion retail and entertainment complex within Changi Airport, looking to leverage the high purchasing power that travellers have.
With this change of scenario in the travel and luxury retail industries, marketing gurus have the opportunity to use travel data to target and engage high-value consumers. Luxury brands can take advantage of what some have dubbed the ‘Golden Hour’, the time spent in the airport terminal after security, to reach these passengers with relevant offers and experiences.
What the future holds
The trend of luxury brands and travel tourism coming together in unison will show no sign of a meltdown as all stakeholders realise the benefits in synergy to the benefit of all. Using travel insights, savvy luxury retailers can calibrate highly personalised and focused marketing campaigns that truly engage their target audiences and build special experiences for these unique customers.
Fortunately, for luxury retailers in APAC, there’s no dearth of travel data. The region is home to large travel hubs such as Singapore and Hong Kong, with more than 100 airlines and millions of passengers passing through.
Dubai, too, has been growing as an international travel hub over the years. By capitalising on travel data, luxury brands can reach more relevant audiences and target them with appropriate experiences.
“The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” Marcel Proust