Tracking the evolution of onboard retail on cruise ships

Cruise lines are expanding their focus on retailing to improve the guest experience and increase onboard revenue. Allan Jordan explores the latest trends with the help of cruise executives

Tracking the evolution of onboard retail on cruise ships
A retail display onboard MSC Cruises' MSC Bellissima (Image: MSC Cruises)

One of the newest areas cruise lines are focusing on to increase their onboard passenger revenue is retailing. While cruise ships have always had shops, today’s operators are looking to go far beyond simply selling basic duty-free items, souvenirs and other necessities. Instead, they are exploring how they can make shopping a broader part of the overall cruise experience.

“Duty-free products are very appealing, so shopping is an essential part of the cruise vacation,” says Ross Henderson, senior vice president of onboard revenue operations for Norwegian Cruise Line, noting that passengers’ changing tastes are influencing how the cruise lines are approaching retail operations. “Over the past two decades, onboard retailing has shifted from traditional souvenir shopping to a more diversified experience.”

The first modern cruise ships had small, hidden shops packed with trinkets and souvenirs, as well as duty-free liquor and cigarettes. Although the space for retailing improved on the later mega cruise ships, often being expanded and moved to a more visible location in the atrium, the shops still offered the tried-and-true merchandise mix. “Historically, the cruise lines have used a set formula featuring jewellery, liquor, watches and a small fragrance area,” comments Adrian Pittaway, head of retail at MSC Cruises. “Today, we’re looking at how you integrate shopping into the cruise experience. We don’t want it to be in segregated areas.”

Generally, the size of the cruise ship dictates the size of the shopping area, but most cruise lines are now finding ways to optimise this space, often taking it beyond the confines of the stores. Pop-up displays are now common, but they are just one element of the new approach to selling. For example, Carnival Cruise Line has expanded to offering everything from bathrobes, to coffee cups in cafés and beer glasses at the onboard breweries. Some analysts suggest the brand now has total retail sales of over US$300 million annually. “We’re looking at how we better infuse retail to the overall cruise environment and make it more meaningful for our guests,” says William Butler, the line’s vice president of retail services. “The retail space remains more or less the same, but we’re looking at how items are positioned in the store creating, for example, new branded areas.”

The changes in onboard retailing are not limited to one cruise segment or any particular geography. Germany-based brands TUI Cruises and AIDA Cruises know that while German passengers tend to be value oriented, they enjoy shopping while onboard. Starting with Mein Schiff 6, TUI has worked with travel retail partner Gebr. Heinemann to adopt a new, unique interior design concept that integrates the shops into the passenger areas with a meandering, open marketplace not separated by doorways. AIDA is taking a similar approach.

“AIDA is moving away from the one shop concept to multiple outlets spread out over several decks, inviting guests to browse and spend time in these spaces,” says Casper Koch, director of onboard revenue for AIDA Cruises.

Meanwhile, Celebrity Cruises has introduced a new Serendipity concept (starting on the Solstice-class vessels), where the shops on its ships change daily. In addition, it has also unveiled a ‘Sensory Shopping Journey’, which is designed to engage the guests’ five senses: sight, sound, scent, taste and touch.

“Retail on our ships has shifted dramatically,” explains Michael McCarthy, associate vice president of onboard revenue for Celebrity Cruises. “The days of buying quirky port t-shirts and souvenirs are gone with guests now seeking elevated, unique experiences and offerings.”

Cruise lines are also recruiting executives from the onshore retail industry, drawing on their expertise to build better at-sea retailing opportunities. Pittaway, for example, started his career at British retailer Debenhams and later managed airport retailing before heading a group that operates the more than 160 boutiques across MSC Cruises’ fleet. Meanwhile, Butler worked at FAO Schwarz and Macy’s before joining Carnival. “My team has increased its level of involvement with Carnival’s retailing partners, building greater depth in our offerings to go beyond the staples that guests expect onboard, including liquor, cigarettes, duty-free and logoed merchandise,” he says.

Most cruise lines work with one of the major partners – Dufry Group, Effy, Harding Retail, Gebr. Heinemann or Starboard Cruise Services – which has helped to bring aboard well-known brand names including Channel, Fossil, Swarovski and Tag Heuer. As part of these new initiatives, cruise companies are also offering boutiques with luxury products from brands like Bulgari, Cartier and Tiffany. Some are even branching out into new retailing categories, such as AIDA’s Living & Gifting range, which features selected home decor products. TUI, meanwhile, has implemented a cross-category concept presenting perfumes alongside textiles and accessories to inspire guests’ purchases.

As part of their changing approach to retailing, cruise brands are also seeking to integrate shopping into the daily shipboard routines. Royal Caribbean International, for instance, is now working towards creating memorable experiences rather than having a traditional transactional retail experience. The company’s newest cruise ship, Symphony of the Seas, has fragrance and beauty bars on the Royal Promenade and liquor tastings in the duty-free store.

Similarly, Celebrity Cruises hosts the Apprentice of Time seminar during which guests explore the inner workings of a timepiece to understand the workmanship in the items. Carnival has everything from its Watch & Scotch seminar to an exclusive new crafting programme with retailer Michaels. Fashion shows and jewellery lectures continue to be common, but even these events have evolved to include exclusive designer trunk shows, invitation-only events, or private viewings such as the ones MSC Cruises hosts for passengers in its Yacht Club suite enclave.

Costa Cruises, which is best known for its presence in Europe and Asia, has also recognised the potential of creating a retail experience. “For many of our guests, part of the exciting onboard experience is the shopping opportunities and events related to shopping,” says Scott Knutson, vice president of sales and marketing for Costa Cruises North America. “Our aim is to take a soft approach so we’re not pushing sales. We want our shops to be warm, friendly, welcoming and informative, so our guests are comfortable and find the experience enjoyable.”

Understanding that cruise guests have time during their vacation to explore items and contemplate purchases, the lines have shifted away from the aggressive daily promotions, taking retailing into relationship building, adding to the cruise experience. In doing so, retailing is taking its place alongside the bars, speciality restaurants, spa and shore excursions increasingly contributing to the growth in onboard revenues.

This article was first published in the Autumn/Winter 2019 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.

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By Allan Jordan
28 January 2020

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