The rise of shopping tourism: brands strengthen their presence in strategic locations

22-11-24

In an increasingly digitized world, physical stores continue to play a crucial role in the strategy of global brands, especially in the field of shopping tourism. The experience of purchasing products in iconic establishments in cities such as Paris, New York or Tokyo remains an irresistible attraction for millions of tourists.

Despite the exponential growth of e-commerce, physical stores remain relevant, especially in key tourist destinations. According to a study by IBM's Institute for Business Value and the National Retail Federation, 72% of consumers worldwide prefer to shop in physical stores. This preference is intensified in the context of tourism, where the ability to touch, try and immediately take away products adds significant value to the shopping experience.

Luxury brands, in particular, have understood the importance of offering unique experiences in their flagship stores located in strategic areas. These stores not only function as points of sale, but also as spaces that reflect the brand's identity and values, attracting tourists who are looking for more than a simple commercial transaction.

The choice of store location is critical to attracting shopping tourists. Cities such as Paris, with its iconic Avenue des Champs-Élysées; New York, with Fifth Avenue; and Tokyo, with the Ginza district, are examples of destinations where brands compete for prime space. These areas not only offer a constant flow of tourists, but also bring prestige and visibility to brands.

A Knight Frank report highlights that, even in times of economic uncertainty, the location of physical stores continues to be a key factor in the retail market. Large firms are increasingly demanding the best location for their stores, helping to maximize their profits and offsetting the high rents paid in city centers.

In the competitive world of retail, the shopping experience has become a key differentiator. Physical stores offer tourists a unique opportunity to immerse themselves in the brand's culture. From architecture and interior design to customer service and interactive experiences, every element is carefully designed to create an emotional connection with the visitor.

In addition, the integration of technology into physical stores has enhanced the customer experience. According to Adyen and KPMG's Retail 2022 Report, 55% of consumers say they are more likely to shop at retailers that use technology to enhance the experience. This includes everything from smart mirrors to augmented reality apps that allow customers to visualize how they would look with certain products.

Shopping tourism not only benefits brands, but also has a significant economic impact on host cities. Tourists who travel for the purpose of shopping tend to spend more than the average tourist, contributing to the growth of sectors such as hospitality, catering and transportation.

A study by the World Tourism Organization (UNWTO) reveals that shopping tourism accounts for a substantial share of tourism spending in many cities. For example, in Paris, it is estimated that 60% of international tourists make purchases during their visit, generating significant revenue for the local economy.

Despite the advantages, physical stores face challenges in the digital age. Competition from e-commerce and changes in consumer behavior force brands to constantly innovate. However, this situation also presents opportunities. The combination of online and offline channels, known as omnichannel, allows brands to offer a more complete and personalized shopping experience.

According to a CBRE report, retailers are expected to continue to invest in physical stores, with a greater focus on prime locations. The physical store will continue to be the preference of consumers, with its reflection in the jump to offline by more and more digital native brands.

Shopping tourism remains a vital economic driver for many cities and a key strategy for global brands. The combination of strategic locations, unique shopping experiences and the integration of technology into physical stores enables brands to attract and engage tourists from around the world. As the retail landscape evolves, the ability to adapt and deliver added value in the physical environment will be critical to success in the competitive shopping tourism market.