Shopping Tourism: What is it and Why it Should Matter for Retailers

Tourism is a big key to success for retailers. After all, tourism brings in different kinds of visiting patrons from all kinds of destinations who want to experience unique and local cultures. Recently, however, shopping tourism, or retail tourism, in particular, has gained traction. Now, it’s up to the retailers to capitalize on tourists who are visiting locations for the retail experience.

Shopping tourism (also known as retail tourism) refers to the phenomenon or combination between tourism or traveling and the retail industry. Specifically refers to the practice of traveling or visiting destinations primarily for the purpose of shopping. This type of tourism involves people traveling from their home country or town to another location, particularly to take advantage of the shopping opportunities available to them. This includes shopping for luxury goods, fashion items, electronics, unique local products, food, and more.

Since travel and tourism are closely tied to clothes shopping, trying out local cuisine, and seeing local products, shopping tourism is an impactful new emergence in the tourism industry. In fact, according to a joint research by the World Travel and Tourism Council (WTTC) and Hospitality & Tourism Research Centre of The Hong Kong Polytechnic University, retail tourism contributed a substantial 178 billion US dollars (6%) of the gross domestic product (GDP) of the global Travel & Tourism sector's value. This shows how much of a great boost shopping tourism can bring to economies. It also shows just how much potential it can bring to retailers who are smart enough to take advantage of it.

Some of the key features and elements of shopping tourism include:

1. Destination Shopping: Tourists often target cities or regions renowned for their shopping experiences. Major shopping destinations include cities like Paris, New York, Milan, Tokyo, Dubai, and Hong Kong, which are known for their high-end boutiques, expansive malls, and unique markets.
2. Economic Impact: Shopping tourism significantly contributes to the local economy. Tourists spend money not only on retail goods but also on accommodation, dining, transportation, and other services. This boosts the overall economic activity of the destination.
3. Cultural and Local Products: In addition to luxury and branded goods, shopping tourists often seek out local crafts, traditional clothing, and unique souvenirs. This contributes to the preservation and promotion of local cultures and traditions in the local area.
4. Sales and Discounts: Shopping tourism is particularly popular during sales seasons as well. This includes Black Friday in the United States, Boxing Day in the UK, and the summer and winter sales in many European countries. Many tourists plan their trips around these periods to take advantage of significant discounts at these destinations.
5. Experiential Aspect: Modern shopping tourism is not just about buying goods; it's also about the overall experience. This includes visiting iconic or trending stores, participating in fashion events, enjoying gourmet dining in shopping districts, and exploring well-designed shopping environments for tourists and local consumers alike.
6. Duty-Free Shopping: Airports and border locations often have duty-free shops where travelers can purchase goods tax-free. This is a significant draw for shopping tourists, especially for luxury items like perfumes, electronics, and alcohol.

Overall, shopping tourism perfectly blends the leisure of travel with the pleasure of shopping and various retail experiences. This offers tourists a unique way to explore new destinations and retail goods while indulging in the local scenery.

Shopping tourism offers a multifaceted range of benefits—for tourists, retailers, and the destinations they visit. At the end of the day, it contributes to the growth of businesses, local economies, cultural exchange, and more. Take a look at some of the primary advantages of shopping tourism, from a local to a global scale.

For tourists

• Access to Unique and Local Products: Tourists can purchase items that are unique to the destination, including local crafts, traditional clothing, and regional delicacies. These are often unavailable in their home country, which makes the act of shopping tourism more desirable or favorable.
• Better Prices and Discounts: Travelers can take advantage of lower prices, tax-free shopping, or significant discounts. This is especially true during major sales events like Black Friday in the United States or summer and winter sales in European countries.
• Access to Exclusive Brands and High-End Goods: Shopping tourism allows access to luxury brands and exclusive products, particularly in fashion capitals such as Paris, Milan, and New York. These exclusive brands or high-end clothing may not be available or are more expensive in the home countries of tourists and visitors.
• Cultural Experience: Shopping in local markets and stores provides an immersive cultural experience, giving tourists a taste of the local lifestyle, traditions, and craftsmanship.
• Overall Memorable Experiences: Many shopping districts offer more than just retail therapy for tourists. They provide a holistic adventure as well, including gourmet or local dining, entertainment, and aesthetically pleasing environments, which complete the tourist experience.

For local destinations

• Economic Boost: Shopping tourism significantly contributes to local economic activity. This happens through direct spending on goods and services, as well as indirect spending on accommodation, dining, transportation, and other aspects of tourism.
• Job Creation and Opportunities: The influx of shopping tourists creates jobs in retail, hospitality, and related sectors. This can help reduce unemployment and stimulate economic growth in local communities.
• Additional Tax Revenue: Increased spending by tourists can generate additional tax revenue for local governments, which can be used to improve infrastructure and public services in their cities.
• Promotions of Local Products: The demand for unique and traditional items helps sustain local crafts, culture, and industries. This promotes and highlights cultural heritage, while also supporting small businesses.
• New Infrastructure Development: The need to accommodate and attract various tourists often leads to improvements in infrastructure. This includes enhanced transportation networks, better retail facilities, and more efficient urban planning.
• International Recognition: Destinations that become known for their shopping experiences gain international recognition. Of course, this can enhance their overall tourism appeal and attract a broader range of visitors from all around the world.

For retailers

• Increased Sales and Profit: Retailers benefit from the higher spending power of international tourists, leading to increased sales and profitability. Retailers who provide luxury goods or local crafts will also find high sales from shopping tourists.
• Market Expansion: Exposure to international customers can help retailers expand their market reach. They can build a global customer base and improve their services to cater to international and local tourists.
• Brand Awareness: Hosting tourists from around the world enhances the brand visibility and reputation of retailers. This can potentially lead to future sales from returning tourists, a better online presence, and a chance for online purchases.
• For the global economy
• Cross-Cultural Exchange: Shopping tourism fosters cross-cultural exchange and understanding. This is because retail tourism encourages tourists and locals to interact, share experiences, recommend more tourism highlights, and appreciate different cultures.
• Supply Chain Benefits: The demand generated by shopping tourism can benefit the global supply chain, from manufacturers to suppliers and logistics providers. This further promotes international trade.

For the global economy

• Cross-Cultural Exchange: Shopping tourism fosters cross-cultural exchange and understanding. This is because retail tourism encourages tourists and locals to interact, share experiences, recommend more tourism highlights, and appreciate different cultures.
• Supply Chain Benefits: The demand generated by shopping tourism can benefit the global supply chain, from manufacturers to suppliers and logistics providers. This further promotes international trade.

Tourist stores can come in various types, all of which attract all kinds of tourists and contribute to retail tourism. They cater to the diverse needs and preferences of travelers, while also adding value to the tourist experience and the local economy.

Here are some of the common types of tourist stores:

1. Souvenir Shops: These stores specialize in selling items that serve as mementos of the destination, such as keychains, magnets, postcards, T-shirts, and local crafts. Some examples include the shops in popular tourist areas like Times Square in New York City or the Grand Bazaar in Istanbul.
2. Duty-Free Shops: These are found primarily in airports, border crossings, and international zones, offering goods free of local taxes and duties. This makes them cheaper than regular retail stores. Common items include alcohol, tobacco, perfumes, cosmetics, chocolates and treats, and luxury goods. Duty-free shops in major international airports like Dubai International Airport and Heathrow Airport in London are good examples.
3. Luxury Boutiques: These are high-end stores that sell luxury fashion, jewelry, watches, bags, and accessories. They are often found in affluent shopping districts or malls. Examples of luxury boutiques include brands like Louis Vuitton, Gucci, and Cartier in luxury fashion locations like Rodeo Drive in Beverly Hills or Avenue Montaigne in Paris.
4. Local Craft and Artisan Shops: These stores offer handmade items that reflect the local culture and craftsmanship, such as pottery, textiles, jewelry, and art. Examples of this are artisan shops in markets like San Miguel Market in Madrid or the handicraft markets in Bali.
5. Fashion and Department Stores: These are large stores or chains that offer a wide range of clothing, shoes, and accessories. Department stores often include sections for home goods, cosmetics, and more. Some notable examples include Macy's in New York City, Harrods in London, and Galeries Lafayette in Paris.
6. Specialty Food Stores: These stores focus on local or gourmet foods, including regional delicacies, cheeses, wines, chocolates, and other edible souvenirs. Some examples include cheese shops in Amsterdam, wine shops in Napa Valley, or chocolate shops in Brussels.
7. Electronics Stores: Stores specializing in electronic goods such as cameras, smartphones, laptops, and other gadgets are also hotspots for shopping tourists. They often attract tourists looking for the latest tech at competitive prices. Examples include Akihabara district in Tokyo or Sim Lim Square in Singapore.
8. Outdoor and Adventure Gear Stores: These stores cater to tourists interested in outdoor activities and adventures, offering equipment and clothing for hiking, camping, skiing, and more. Famous examples are stores in adventure hubs like Chamonix in France or Queenstown in New Zealand.
9. Antique and Vintage Shops: These shops are known to sell antique furniture, vintage clothing, collectibles, and other unique items from the past. Antique shops in districts like Portobello Road in London or the Marais in Paris are great examples of this type of tourist store.
10. Museum and Attraction Gift Shops: Located within or near museums and tourist attractions, these shops sell themed merchandise related to the site, such as books, replicas, and educational toys. Some examples of gift shops include the Louvre in Paris, the Smithsonian museums in Washington, D.C., and theme parks like Disneyland.

Shopping tourism can do a lot for retailers. To ignore this phenomenon would be a big mistake on retailers’ end, especially those located in popular tourist cities or shopping districts. Here are a few compelling reasons why retailers should care about shopping tourism and its possible impact:

Increased Revenue

Tourists tend to spend more than local shoppers. They are prone to splurging on luxury goods, souvenirs, and unique items they can't find at home. Because of this, an influx of tourists can significantly boost sales volumes for retailers, especially during peak travel seasons.

Economic Stability and Growth

Relying on both local customers and tourists helps stabilize revenue streams. Even during local economic downturns, tourist spending can sustain retail businesses. Catering to tourists can also open up new markets, as international customers might seek out the same brands and products when they return home. This drives global sales.

Of course, tourist spending in retail also supports the broader local economy. This contributes to job creation and business growth in related sectors such as hospitality, transportation, and entertainment.

Brand Exposure and Loyalty

Serving international tourists increases brand exposure globally. Satisfied customers are likely to promote the brand through word-of-mouth and social media, which will enhance a retailer’s reputation. Positive shopping experiences can lead to repeat visits and loyalty as well. Tourists will likely seek out the same brands and stores on future trips or online.

Promotion of Local Products

Retailers can play a role in promoting local culture and products. This makes their stores attractive destinations for tourists looking to take home a piece of their travel experience. Local crafts, regional specialties, and culturally unique items also give retailers a distinct edge. This will attract tourists looking for authentic experiences during their visits.

Competitive Advantage

Retailers catering to tourists often enhance their services. This sets them apart from competitors and attracts a broader customer base. Creating special deals and packages for tourists can drive sales and increase foot traffic. All of these will give retailers a competitive advantage.

Collaboration Opportunities

Retailers may also have the opportunity to collaborate with travel agencies, hotels, and tour operators to create integrated packages and promotions. This enhances their reach and appeal to shopping tourists. Partnering with local events, festivals, and tourist attractions can drive additional traffic to retail stores as well.

Adapting to Market Trends

Catering to the diverse preferences of international tourists pushes retailers to innovate and adapt. This keeps their offerings and services fresh and competitive. Interacting with a global customer base provides valuable insights into consumer preferences and trends as well. This will help inform the product development and marketing strategies of retailers.

If retailers want to prosper, not only do they need to acknowledge the power of retail tourism, but they also need to adapt and change with it. Retailers need to implement a variety of strategies to attract and cater to shopping tourists and fully reap the benefits of shopping tourism.

Here are some effective shopping tourism strategies for retailers.

• Enhance the In-Store Experience
• Offer Exclusive Products
• Leverage Digital Labels or Other Retail Technologies
• Create Tourist-Friendly Packages and Promotions
• Collaborate with Travel Industry Stakeholders
• Organize Shopping Events and Leverage Experiential Retail
• Enhance Store Ambiance

#1 Enhance the In-Store Experience

Hire staff who speak multiple languages and provide multilingual signage and brochures. This will help make international tourists feel welcome and understood. It’s also best to train staff to understand and respect cultural differences, which will ensure a positive shopping experience for all tourists.

#2 Offer Exclusive Products

Make sure to stock unique local products and souvenirs that tourists can't find elsewhere. This emphasizes authenticity and cultural significance. Create limited edition items or collaborate with local artisans and designers to offer exclusive products that appeal to shopping tourists.

#3 Leverage Digital Labels or Other Retail Technologies

Installing certain retail technologies also improves the retail experience for both retailers and tourists. A digital label solution, for example, modernizes a retail store and streamlines its operations. Instead of traditional paper labels, digital labels can be updated within minutes. A great example would be SOLUM’s Newton ESL. Its ease of use, vibrant display technology, multifunctional buttons, and 7-page capacity also make it easier and more engaging for tourists to shop and learn more about the products.

Not only that, but SOLUM ESL is also equipped with other features that would allow retailers to leverage other retail technologies. For example, with NFC (near-field communication) capability, you can use QR codes and mobile payments. Having a wide range of international payment methods can help facilitate smooth transactions and loyalty from tourists. These kinds of retail technologies will elevate the shopping tourism experience for all.

#4 Create Tourist-Friendly Packages and Promotions

Offering discounts, promotions, and special deals specifically for tourists is also another great strategy. Partner with hotels and tour operators to create attractive shopping packages. Develop loyalty programs that cater to international customers, and offer rewards and incentives for repeat purchases.

#5 Collaborate with Travel Industry Stakeholders

Negotiate collaboration with hotels, airlines, and tour operators to provide exclusive shopping experiences, discounts, and promotions to their customers. You can also partner with local tourism boards to feature your store on tourist maps and guides, ensuring visibility among visitors.

#6 Organize Shopping Events and Leverage Experiential Retail

Transforming the shopping experience is also essential when connecting with modern shoppers and tourists. This makes experiential retail crucial. Host events such as fashion shows, product launches, and cultural demonstrations that attract tourists and provide a unique and wholesome shopping experience. It’s also possible to offer themed shopping tours that include visits to local landmarks and your store. This provides a curated experience for visiting patrons.

#7 Enhance Store Ambiance

As much as possible, incorporate local culture and themes into your store's decor to create an immersive experience that reflects the location. Provide amenities such as comfortable seating, free Wi-Fi, and refreshments to enhance the shopping experience for tourists.

Shopping tourism as a whole holds a lot of opportunities for retailers. And the retailers who know how to implement the right strategies will rise among the competition.

Talk to SOLUM experts now and find out how a retail technology like a digital label will help you attract more tourists and enhance the overall shopping experience.