The Science of Shopping on a Cruise Ship | TravelPulse
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Last updated: 06:00 PM ET, Wed December 13 2017
The Science of Shopping on a
Cruise Ship
CRUISE LINE & CRUISE SHIP | JASON LEPPERT | DECEMBER 13, 2017
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PHOTO: Retail corridor aboard MSC Cruises' MSC Seaside. (photo by Jason Leppert)
FEATURED VIDEO
With the recent news that Carnival Cruise Line is in the process of overhauling
its onboard retail experience, TravelPulse discussed shopping trends with Miguel
Maal, a partner at strategy consulting firm OC&C.
Maal provided an in-depth analysis of the present and future status of retail at
sea:
TravelPulse: What di!erentiates the onboard retail experience from, say,
shoreside malls and individual brick-and-mortars these days?
Miguel Maal: The three things that benefit cruises in respect to shoreside malls
and individual brick-and-mortars are:
—A detailed understanding of the demographics and leisure “mission” their
travelers are on.
https://www.travelpulse.com/news/cruise/the-science-of-shopping-on-a-cruise-ship.html
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The Science of Shopping on a Cruise Ship | TravelPulse
2/10/20, 11:41
—A keen mapping of the purchase preferences and behavior of these
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—A known time of exposure to travelers, which they can design a “consumer
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purchase journey” around.
TP: What are cruise guests looking for in
shopping that is unique?
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MM: They are looking for a set of combinations
between:
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—A good “deal”, ranging from the tax-related
upsides of being in international waters to not
being abused given they have no immediate
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their passion for their preferred aspirational
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categories, with whom to exchange ideas and that
transactional environment.
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—A retailer they perceive as genuinely sharing
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—Opportunities to bond the travel experience and
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selected purchases into a meaningful, significant
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moment they can remember.
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TP: Is there an increasing focus on theming the
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retail experience, a la Disney, and telling a
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MM: Disney’s overall strategy is to create “themes” it rallies all its revenuegeneration activities around, in a way that each builds onto all other activities:
content (movies, TV series, music, apps), theme parks, merchandising, brand
licensing and—somewhat recently—cruises.
It is a compelling strategy because it poses a significant entry barrier given the
scale that is necessary to make it profitable. However, Disney’s execution of this
strategy is industry-leading and they maintain discipline in quality-based
di!erentiation.
Other cruise companies don’t rely on themes but do focus their brands, ships
https://www.travelpulse.com/news/cruise/the-science-of-shopping-on-a-cruise-ship.html
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The Science of Shopping on a Cruise Ship | TravelPulse
2/10/20, 11:41
and routes based on narrow segments (family, singles, retired, wealthy, etc.) and
cruise missions (resort, party, explore exotic geographies, luxury, etc). Other
ways to di!erentiate include:
—Experience in developing innovation in new builds, which is di"cult to
replicate.
—Lower price for similar experiences, based on larger scale and the ability to
reposition and reroute older ships to more value-oriented service as new-builds
come in.
—Variety of geographical coverage and cruise missions, which allows for a wider
variety of o!ers for repeat cruisers.
—Opportunistic theming of cruises with less restraints to very rigid rules that
Disney needs to abide [by].
READ MORE: The Shopping Mall and Its Premium Brands at Sea
TP: As land-based malls look to become more of a desirable destination
over a necessary errand, how is the onboard experience similarly shaping
up?
MM: There are a limited number of necessary errands while cruising, so
necessity categories are a limited part of the business. Consumers are
increasingly value-conscious for necessary categories, so abuses in pricing tend
to generate increasingly negative reactions on cruises, as in other settings where
options are limited.
More generally, retail is adapting to a wide set of changing behaviors by
consumers, who are tending to think about their purchasing decisions in a more
sophisticated way. Some of these trends are:
—Importance of convenience
—Redefinition of loyalty
—Desire for connection and trust
—Polarization of spend
—Response to experiential retail
—Sensitivity to provenance and ethics
https://www.travelpulse.com/news/cruise/the-science-of-shopping-on-a-cruise-ship.html
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The Science of Shopping on a Cruise Ship | TravelPulse
2/10/20, 11:41
Successful retailers will adjust to these trends according to their target
segments and categories in di!erent ways. The applicability of each of these
varies across travel retail.
One key variable is a common segmentation between “value-travelers” who
book based on deals and tend to make the most of a limited budget, versus
“service-travelers” who pay full price, expect full service and will spend more
freely if they are satisfied with the experience.
TP: Is it simply about more luxurious brands and specific stores like Apple
or Harrods over generic ones?
MM: Retail is taking an increasing role in the majority of travel missions. Travel
retail seems to be more brand-oriented than non-travel retail. As such, many
travel destinations have migrated (partially) to a concession-based model where
they cede space to brands, which can control the “retail experience” for their
customers more directly.
This tends to be a solution which is more apt for high-end travel where there is
a significant volume of travelers and [it] can sustain multiple brands. Some
examples are lobby retail in the top hotels on the Las Vegas Strip, New York 5th
and Madison Ave midtown shopping, Harrods in London, etc.
In cruises, this is not a proven model yet, although there are several pilots that
can be understood in this way.
READ MORE: Where to Find the World’s Best Shopping Streets
TP: What is being done to compete against online retailers such as Amazon?
MM: It is not clear whether cruise operators will compete directly or find a
cooperation model with Amazon. This is an issue that is being actively explored
today.
A possible, unconfirmed model would be for cruise operators to have onboard
retail for categories that are not “natural” for Amazon. Categories that benefit
from in-person experimentation, or that are sold in low volumes or where the
average price does not sustain Amazon’s fulfillment costs are examples of
these.
Another aspect is the combination of assortment and fulfillment. Cruise retail—
given the physical constraints of ships—could never compete in assortment if it
https://www.travelpulse.com/news/cruise/the-science-of-shopping-on-a-cruise-ship.html
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The Science of Shopping on a Cruise Ship | TravelPulse
2/10/20, 11:41
had to fulfill the purchase onboard since inventory limitations are strict.
However, [an] assortment can easily be expanded in pre or post-cruise
fulfillment models, which are being studied as well.
Finally, Amazon has approached cruise lines to experiment adding Echo devices
in cabins, much like they have in some hotels. This creates the opportunity to
negotiate.
Needless to say, everyone is cautious both of competing and collaborating with
Amazon.
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