museums&MORE Spring 2012

Shopping at Sea

Onboard boutiques turn cruise ships into floating retail centers

Shipboard retail used to consist of cramped spaces that offered duty-free merchandise and toiletries. Today’s mega-ships, however, feature big-name stores, high-end items and thousands of eager shoppers ready to buy. Space allocated to retail has been steadily increasing as cruise lines introduce huge vessels each year.

Even before cruise ship passengers get their ‘sea legs’, they are handed a plastic card, which serves as both the key to their cabin and to a cash-free world of onboard shopping. Once the luxurious liner sails into the open sea, the duty-free boutiques open and the shop-portunities begin, said William Downey, marketing and revenue manager for Royal Caribbean International’s Oasis of the Seas.

“Guests spend anywhere from $500,000 to more than $1 million a week in the shops on a typical seven-day cruise aboard the Oasis,” said Downey, who is responsible for the ship’s overall revenue. He manages all areas onboard where guests spend money, except for the bar, including 15 gift shops spread out over three decks.

Staffed by more than 40 crewmembers, Oasis shops are operated by the cruise line’s gift shop retail partner company, Starboard Cruise Services. Based in Miami, Starboard oversees the retail operations and supplies merchandise to more than 80 ships worldwide.

“In a typical retail environment, you’d rent space per square foot, but on the ships, it’s a little different: Starboard’s rent is actually paid in a commission of their total revenue,” Downey explained, adding that 25 pallets of goods are loaded onto ships once a week and stored below deck in a massive warehouse.

What’s in Store
While every cruise line is different, most vessels have five core shops: jewelry and watches; fashion; cosmetics and fragrances; logo wear and a general store selling liquor, tobacco and sundries. Some of the newest ships have recently introduced stand-alone branded stores like Coach and Guess, said Jeannette Coto, RCI manager and revenue partner. Other unique shops on the Oasis include Candy Beach on the Boardwalk deck and The Star Pier, a surfing sub-shop next door.

RCI gift shops also offer itinerary-specific products which can be purchased in the local itineraries, Coto added, which is a great resource for guests who have an all-day excursion and don’t get a chance to purchase something while in port.

Downey noted that while every ship carries perennial bestsellers like T-shirts, souvenir pins and magnets, most cruise lines make a concerted effort to compete against the ports-of-call shopping. Although some merchandise has gone more upscale, there are more bargain-hunting shoppers and international guests sailing the seas than ever before.

“Retail executives who focused on the American market 10 years ago now tailor shops to a broader customer base,” he said. “We’re asking: What do those international folks want? Do they want a new camera, a new watch, name-brand clothing or a Royal Caribbean baseball hat?”

Beyond Logos
So what’s the best way to figure out what they’re looking for? Onboard retailers study cruise line passenger profiles to figure out which merchandise categories will do well in different markets and itineraries, noted Harold Gittelmon, managing director of Bristol, UK-based Harding Brothers Retail Limited. The company operates retail gift shops aboard 52 ships on 19 cruise lines, including Carnival and Crystal Cruises, with five more ships slated to join the fleet in 2012.

“The choice of brands flows from the forecast sales mix and passenger profile,” Gittelmon explained. “Each category buyer puts a range (of products) together, including introducing some brands for the first time to sea. The captive nature of our passengers drives a lot of the interactive style of trading, so we get to know the passengers who are not rushing through an airport stressed out of their minds, but on vacation, often with a friend or partner.”

The core categories of beauty, fashion, watches, fine and costume jewelry, liquor and tobacco, bags, and fashion accessories are the key drivers of the business.

“Our passengers are buying for themselves and as gifts to take home for co-workers, relatives and those who have looked after the cat,” he said. “The logo business is also strong on cruise lines; these are very aspirational vacations, and passengers are very proud to wear a piece of Queen Mary 2 clothing when they go to the golf club or pick up the kids from school.”

Onboard boutiques have become successful for several reasons.

“There’s no hard sell, and (lots of) opportunity for continual browsing and trying on,” he said. “You can buy a watch on the last day of a cruise, after having checked the price online and in the ports. Our staff is good at the subtle close, in stark contrast to the port competition in the Caribbean, for example.”

Stellar showcase
Harding Brother shops range in size from one 500-square-foot boutique on an older vessel to stores aboard the new Celebrity Solstice class of ships, which features 19 shops, 30 staff and 5,000 square feet of retail space.

“Sometimes we are involved at the ship’s design stages; sometimes we are given a designed space and told to make the best of it, Gittelmon said.

“We are recognized as the best in the sector in handling product and respecting brand values, and that reputation enables our strong space planning, marketing and visual marketing team to create some incredible environments,” he said. “The daily promotion table, where passengers can have a rummage, is also a key part of the retail theater.”

Time-limited onboard shopping events that take place during “at sea” days have proven enormously popular, such as $10 Day, where vendors set out T-shirts, costume jewelry, scarves and other wares, noted RCI’s Downey.

“People go pretty wild over that,” he said. “They do raffles to build a little bit of excitement, or have sales for only one hour. On the last sea day of the cruise, the Royal Promenade deck has $19.99 watch sets, and you will see $30,000 go in one night. The last day, we do double the (regular) volume; people really get a little crazy.”

Cruise ships post shopping deals and special events in their daily newsletter, delivered to guests each evening. On the Oasis, sales are also promoted on the ship’s closed-circuit television show. Trunk shows, where designers like Sophia Fiori bring on $1 million in diamonds, are also huge hits with passengers, Downey reported.

“Companies like Ice Watches approach Starboard, and then we get our commission from the special event sales,” he said. “During a seven-day cruise with three sea days, there’s enough time to do these (events). On a 12-day cruise, you have to spread out your promotions and do things very differently. On a three- or five-day cruise, you basically throw everything out there.”

Wendy Helfenbaum is a writer, television producer and avid cruiser from Montreal. Visit her at www.taketwoproductions.ca.