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Pandemic impact on customer segmentation in travel retail


Leading travel and travel retail research agency, m1nd-set, reports on significant changes in the agency’s benchmark customer segmentation models, that are unique to travel retail, in the wake of the global Covid19 pandemic.

According to m1nd-set's latest research, the five customer segment families have changed quite significantly in terms of their respective proportions among shoppers in the travel retail environment, as a result of the pandemic. The five segments, named to represent the typical shopper behaviour in travel retail, are: “Local Touch Seekers”, “Emotional Brand Image Seekers”, “Price Sensitive Shopping Lovers”, “Rational Pre-Planners” and “Low Income Buyers”.

The proportion of Local Touch Seekers saw a sharp decline in 2021 compared to the 2017-2020 period, reaching an all-time low in 2021, falling from 36% in 2020. This segment now represents 20% of shoppers. The Rational Pre-Planners segment on the other hand has grown quite significantly in 2021, reaching 27% of all shoppers, considerably higher than the pre-covid period, when it accounted for between 17% and 19% of shoppers in duty free and travel retail. This change in behaviour, m1nd-set says, may be explained by sanitary concerns that emerged from the pandemic, and which pushed people to plan their purchases in advance, to avoid spending too much time in the duty free shops.

The Emotional Brand Image Seekers and Price-sensitive Shopping Lover families both saw a slight increase in size between 2020 and 2021 and each segment now represents 20% of all shoppers according to the m1nd-set customer segmentation. The fifth of these customer
segments, the Low Income Buyers, has remained quite stable between 2017 and 2021, representing between 13% and 14% of shoppers in duty free; but experienced a gentle decline to 12% in 2021.

In this latest research, m1nd-set, who has analysed traveller behaviour, including both shopper and non-shopper behaviour for 15 years across all world regions, categories and channels, provides a detailed analysis of how shopper behaviour across the segments has evolved across these variables, as well as by gender, age-group and travel purpose.

In terms of the regional overview, m1nd-set claims that Rational Pre-Planners are the most representative among all buyers in duty free shops with the exception of the Asia Pacific region, where the buyers are more likely to be Emotional Brand Image Seekers. By age group, Millennials and Middle-aged shoppers are more likely to be Rational Pre-Planners compared to the other age groups, while among Gen Z buyers there is a higher share of Price Sensitive Shopping Lovers, compared to the other age groups. In the Senior age bracket, Local Touch Seekers are the most representative of the customer segments.

Reporting on the segment family distribution across categories, m1nd-set reveals that the outlook is quite eclectic. Rational Pre-Planners are more likely to purchase Tobacco, Perfumes and Alcohol than other segments. In addition to these core categories, it is also the top segment purchasing Electronics, Toys, Clothing & Accessories and Jewellery & Watches.

Emotional Brand Image Seekers is the segment purchasing Make-up, Confectionery and Skincare the most compared to other segments, while the Fine Food category is particularly likely to be purchased by Local Touch Seekers and Price Sensitive Shopping Lovers, as well as Rational Pre-Planners. Local Touch Seekers are also the most likely to purchase Souvenirs & Gift Items and Travel accessories.

Commenting on the travel retail customer segmentation model, m1nd-set Chief Operating Officer Clara Susset said: ”Shoppers behave quite differently in the travel retail environment and have a different set of expectations than consumers when shopping in the high street. Customer segmentation therefore needs to be adapted to the various influencing elements that are unique to the sector; elements such as excitement, stress, desire for novelty and expectations of differentiation and uniqueness. It needs to take account of these variables as well as specific attitudes to shopping, travel frequency, in addition to demographic data of course.”

Dr. Peter Mohn, m1nd-set CEO and Owner, added: “It is important for the airport, airline, cruise or ferry operator and their commercial partners, to understand the proportions of each customer segment that are travelling through their facilities and visiting their shops. Only when this has been analysed and understood, is it then possible to adapt the product selection and brand portfolio according to the customer segment families represented in a travel retail location.”

“Understanding who the customer is and which segment they belong to,” Susset continued: “is essential when designing the consumer communications, not least among staff in duty free and travel retail stores. The customer segmentation model has proved to be a highly successful tool in staff training programmes where staff are trained on which are the most common segments in their retail environment, how to identify consumers based on their segment family and then how to approach them, and which type of product and price range to propose.”

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