By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
While it’s easy to see COVID-19 simply as a disruptive
anomaly, a more interesting perspective would be to view it as a supercharged
catalyst for changes that would have taken place regardless. Nowhere is this
more apparent than the damage it’s done to the travel and retail sectors.
For the latter, we’ve long been inundated with forecasts
about the coming retail apocalypse, and only now when that decades-long
evolution has been compressed into a matter of months do we consider adaptive
measures. Given this rapid transition to contactless everything, what are you
going to do with your hotel’s gift shop?
Before we officially entered the present era of Covid-safe
minimalistic operations, for many of the properties we helped asset manage our
top-level analyses showed that the gift shop wasn’t worth the cost of
maintaining it. While sales volumes were often above variable costs (barely),
the hoteliers we worked with never fully integrated the opportunity costs
involved with what else that space could be used for and how the gift shop
amplified the guest experience.
Imagine converting a gift shop near the lobby entrance into
a small café or a grab-and-go sundry. Which would generate more sales volume?
And more importantly, which would be of more everyday utility to your visitors,
be they overnight guests, event attendees or locals?
Alternatively, many of tried to make something special out
of their gift shops by stocking products from regional producers that can’t be
found elsewhere. The goal here is a noble one – to service the demand for
‘authentically local’ experiences. Yet, few consider the amount of time needed
to set up these partnerships and maintain inventory levels relative to the
number of customers who pass by.
Add to this that there will undoubtedly be fewer people
entering your gift shop during these turbulent times of depressed occupancy and
it makes the entire effort moot. While I am in no way condemning the promotion
of local goods, I ask you to think broader. In order to get greater customer
volume, you need something special to draw them in.
But do you notice the pattern here? It’s all about the
holistic experience you provide. The modern gift shop is not an independent
sales vertical for tchotchkes and touristy trinkets; it exists as part of an
ecosystem of revenue generators, all of them working in harmony to amplify the
onsite journey.
If there’s another consequence of Covid and the retail
apocalypse, it’s that it has catalyzed our entrance into the experiential age.
Storefronts are no longer places mainly for transactions – all that can occur
online via Amazon, eBay or Shopify. And indeed, many would now prefer online
purchases because it’s far more convenient and it’s contactless. Rather,
physical shops are places where customers can discover new merchandise,
interact with brands and educate themselves about how certain products will
benefit their well-beings.
With this in mind, what if the future of your gift shop was
not a ‘shop’ but instead an ‘experience’? In this new model, no inventory is
kept within sight nor can visitors even walk out with an item. Think of it like
an Ikea showroom where you provide a guided journey from kiosk to kiosk to show
the best of what a specific product can do (with one-way markers on the floor
to promote physical distancing). There’s no cash register, only a single,
knowledgeable clerk with an iPad to facilitate touchless payments. If a guest
purchases an item, it can delivered to their room in a safe and contactless
manner within 24 hours or shipped worldwide for an extra fee.
Next, consider the ‘gift’ aspect. A store designed for
immediate transactions is more or less one set up for people to treat
themselves in that moment. Suppose you have a couple staying at your hotel and
the husband sneaks off during his wife’s spa appointment to peruse your wares.
On top of having an item sent to the room, you could coordinate sanitized gift
wrapping and a specific time of delivery to better fulfill the ‘surprise and
delight’ factor. And if you are able to gift wrap an onsite souvenir, there’s
definitely a way to do it for those back home.
Above all, when you think about transforming this space into
a showroom, if nothing else you are adding another point of entertainment so
there’s more to differentiate your onsite experience from other properties and
to make the guest’s journey more memorable to thereby cajole return visits and
positive word of mouth. This is a base level of the ‘halo effect’ or synergy
that can be manifest if done right.
As we continue to adjust to the rigors imposed by the
pandemic, the gift shop is but one more operation that you need to rethink from
the ground up. Ruminate about what a ‘gift experience’ can be that’s true to
your brand and your locality, and you may just find a viable profit-maker in
the next normal.
About Larry Mogelsonsky
Larry Mogelonsky
One of the world’s most published writers in hospitality, Larry Mogelonsky
is the principal of Hotel
Mogel Consulting Limited, a Toronto-based consulting practice. His
experience encompasses hotel properties around the world, both branded and
independent, and ranging from luxury and boutique to select-service. Larry is
also on several boards for companies focused on hotel technology. His work
includes five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule”
(2013), “Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel”
(2018). You can reach Larry at larry@hotelmogel.com to discuss hotel business
challenges or to book speaking engagements.
Media Contact:
Larry
Mogelonsky
Email: larry@hotelmogel.com
Website: http://hotelmogel.com/
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