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‘Cruising to new brand followers’ CiR research reveals key insights from the Cruise market

CiR research has revealed the significant opportunity that the cruise market offers brands in the American and European regions.

Continuing the CiR review of Cruise research, the focus turns to the two key markets of North America and Europe.

With Europe expected to account for a third of global cruise passenger traffic in 2016, the Mediterranean, North European and Nordic regions offer significant potential for the Duty & Tax Free retail sector. 

Across the Atlantic, the Caribbean and wider North American cruise industry, described by the Cruise Line International Association (CLIA) as the ‘Queen’ of the global cruise industry, also continues to offer significant potential for the sector. High passenger traffic coupled with high interest in on-board Duty & Tax Free retail, illustrates the potential of this channel in these regions to retailers and brand owners alike.  

The European Cruise Passenger

Europe is recognised as a key and well-established global cruise market, incorporating the Mediterranean, North European and Nordic regions, and is expected to account for a third of total cruise capacity deployment in 2016. With 42 cruise lines operating over 120 ships within the region, the sector is due to accommodate over 29 million passenger visits at around 250 European port cities.

Over three quarters of European cruise passengers take trips of between 4 and 13 nights, with just 6% of trips lasting 2-3 nights. A further 20% of trips are in excess of 14 nights, so cumulatively 94% of trips are 4 nights or longer, indicating a captivated audience and enlarged opportunities to engage shoppers. This is reflected in the high purchase interaction rates, with 88% of passengers making a purchase from either onboard or on-land throughout their cruise duration. The Souvenirs category is the most likely to be purchased from duty free, followed by the Beauty and Alcohol categories.

The American Cruise Passenger

As the leading global cruise region, North American and Caribbean cruises represents a key Duty & Tax Free retail channel. Accounting for over 40% of global cruise traffic in 2014, and the American nationality being the largest consumer group of cruises globally, this market offers significant opportunity for brands and retailers.

Four out of five American and Caribbean cruise passengers take trips of between 4 and 13 nights, with just 7% of trips lasting 2-3 nights. A further 13% of trips are in excess of 14 nights, so cumulatively 93% of trips are 4 nights or longer. Similar to the European market, this extended break indicates a captivated audience and enlarged opportunities to engage shoppers. This is reflected in the high purchase interaction rates, with 90% of passengers making a purchase from either onboard or on-land throughout their cruise duration. Again, the Souvenirs category is the most likely to be purchased from duty free, followed by Alcohol and the Jewellery & Watches categories.

Development Opportunities

- Brand Recruitment

In both markets, a propensity to buy a non-regular brand is evident, implying that cruise passengers have a greater propensity to widen their brand repertoire in this environment. In the European market over half of the market bought a non-regular brand or a brand for the first time and less than half of respondents purchased a regular brand. Breaking this down, one third of shoppers bought a non-regular brand and almost one in five shoppers bought a brand for the first time. In the American market there's slightly higher brand loyalty, with three in five shoppers remaining with their regular brand, but still two in five shoppers buying either from within a wider brand repertoire, or buying a brand for the first time. The propensity for buying a brand for the first time is similar to European cruise passengers.

- Opportunity to drive spend levels

Propensity to maintain or increase spend levels is also evident across both European and American markets, with just one in twenty passengers reporting that they purchased a cheaper or lower quality brand than they would usually purchase at home. Across Europe, spending is slightly more controlled with six in ten shoppers buying their usual brand or a brand they consider to be very similar to what they usually purchase at home, leaving over one third of respondents who purchased a more expensive or better quality brand than usual. In the American market spending is more discretionary with almost half of shoppers purchasing a more expensive or better quality brand than usual, and less than half of purchasers selecting their normal brand.

- A unique travel retail experience and the role of souvenirs

The enhanced shopping environment, time for browsing and consideration, as well as the overall feeling of vacation, lead to changes in shopper behaviour patterns. This is evident in the categories browsed and purchased, with Souvenirs being the lead category. Over half of European cruise passengers shop for Souvenirs, and one third of all passengers will purchase from the category. Amongst American cruise passengers over half will shop for Souvenirs and just under half will purchase. These levels far exceed penetration and conversion levels seen in the airport channel. With considerable penetration of European and American Cruise passengers purchasing Souvenirs on their trip, enjoying conversion rates of 54% and 71% respectively, the category can be the envy of its adjacents. It highlights the role of souvenirs, but also the opportunity of adjacent categories to present pertinent brands that can act as a souvenir of the trip for passengers. CiR research has unveiled the significance of the presence of on board liquor brands, and how this translates into converted sales in the stores, but more of this to come later.

Report Summary

These reports present extensive new intelligence and insight, taken from brand new in-depth research amongst cruise passengers. Recommending ways to maximise growth in this rapidly expanding channel with detailed insights into Travel Retail offer perceptions (both on-board and in destination), visitor, buyer & non-buyer behaviour, detailed analysis of core categories (including Alcohol, Beauty Confectionery, Tobacco, Fashion & Accessories, Jewellery & Watches, Electronics & Travel Accessories, and Souvenirs), purchase drivers, triggers and barriers, and future motivations and purchase intention in Travel Retail.

For more details on the European Cruise Report or North American & Caribbean Cruise Report, please follow the links. Also available are the European Cruise 2016 | On-Trade Alcohol Review and North American & Caribbean Cruise 2015 | On-Trade Alcohol Review, of major interest to Liquor suppliers.

For further enquiries please email; enquiries@counterintelligenceretail.com