Here’s an opinion-editorial I did recently for LS:N Global, the trend forecasting content platform from The Future Laboratory (disclaimer: where I used to work).
‘ The future of tax-free shopping is undoubtedly paperless and almost ubiquitous. ’
Luxury shoppers are making the world a smaller place. Exchange rates and economic stability are the drivers behind where retail-loving international travellers choose to spend their money. When they can, they shop tax free. In 2015 alone, we have seen consistent growth in tax-free shopping (TFS), with growth of 40% year-on-year in August, following a high of more than 50% growth year-on-year in April. We know this, because at Global Blue, we track it.
We’ve also witnessed the rise of Chinese consumers, who are now responsible for 30–40% of global tax-free sales fairly consistently. On the other side of the world, we’re currently tracking how the strong dollar to weak euro relationship is driving Americans to Europe, where they effectively enjoy a 15%-off sale right now – especially for TFS. These currency exchange benefits have led to an increase in global TFS sales by Americans to more than 53% in the first half of 2015 versus the same period in 2014.
While data analytics continue to transform how business is conducted, there’s a lack of investment internationally in the skills and expertise needed to draw commercial insights for strategic gain from the wealth of data available to businesses. In today’s digital age, savvy consumers demand a seamless and flawless experience from the moment they engage with any brand regardless of the platform, and TFS is no exception. We know that successful brand engagement means connecting with and influencing shopper behaviour at every possible touchpoint. From online and mobile, all the way through to bricks-and-mortar stores, consumers need to experience a seamless and consistent journey. Digitisation has completely transformed our business and now drives the uptake of global TFS opportunities.
Using data to understand business intelligence now gets widespread attention at the highest levels of organisations worldwide. Although not a new field, the latest techniques and technologies enable businesses to join the dots on consumer behaviour more seamlessly. We see this insights journey as a collaborative effort in partnership with our merchants. When there’s a pipeline of service, businesses need to think about the end customer throughout the process. Our priority is increasingly the global shopper experience through services such as Currency Choice, our Shop Tax Free loyalty card, and working with our network of merchants on how to market to global shoppers.
We use transaction-based data. This maps real-time shopping behaviour, which we can leverage to get closer to travellers and shoppers. We share this information with merchants to help them deliver better value to their customers and benchmark performance in an increasingly competitive global luxury marketplace.
TFS is a growth industry. Global shoppers from across different regions are discovering their appetite for luxury shopping and overseas travel combined in one package. Global Blue is in an exceptional position to grow as market leader as we have a unique dialogue with 35m travellers per annum who use our network.
Our current thinking is: Why not give global shoppers an extra service to prove that we can build on the core tax- free refund we give them and add more value to their shopping experience? This might include loyalty discounts on travel, a VIP package including airport pick-up, or complimentary perks at their favourite hotel chain. If we add value to their experience, we can get to know them better.
The future of TFS is undoubtedly paperless, almost ubiquitous and an overseas travel norm. As it becomes invisible and even easier, it will become as routine as printing off their boarding pass at home or withdrawing money from an ATM.