Retail at sea has grown up. Hit by everything from the pandemic to supply chain challenges to inflation, the industry has discovered creative ways to appeal to cruise passengers. Few have more experience — or have made more changes — than Starboard Cruise Services, which is an LVMH Moët Hennessy Louis Vuitton company, and bills itself as the leading global retailer at sea.
The company has more than 700 onboard retail brands on upwards of 75 cruise ships that belong to 10 worldwide cruise lines, including Carnival, Celebrity Cruises and Royal Caribbean International. Starboard has 400 land-based team members and 2,400 retail associates at sea. NRF contributing writer Bruce Horovitz spoke with Lisa Bauer, president and CEO of Starboard Cruise Services, to find out what’s new in retail at sea.
What exactly is retail at sea?
It’s duty-free shopping on cruise ships. What started out with souvenirs is now a multibillion-dollar industry. We’ve been in the retail cruise industry for 60 years, so we certainly have grown up with it. It’s dynamic and integrated into the cruise experience.
How do you do that?
Our ships sail all over the world, so they may be in the Caribbean for the winter and then Europe for the summer, or they’re in Australia for the winter and Alaska for the summer. Basically we’ve got ships pretty much anywhere in the world and we custom-design the retail offerings to that particular ship in that particular itinerary.
Can you give me an example?
When our ships go to Alaska in the summer, obviously the logo apparel we do is more long sleeves. The gifts from our Alaska itinerary would be very different and it would be indigenous to local things from Alaskan culture. We totally customize what that guest is looking for so it’s immersive in that destination. Think about people that are going on shore excursions in Alaska and what they might need to go dog sledding and things like that. It’s everything from outerwear to different mementos that they can bring home from their experience in Alaska.
What works best for retail at sea?
What we try to do is come up with exclusives. For example, it might be the size of the offering. The bottle of Hennessy Pure White is larger, and it’s exclusive to cruise ships. Or maybe different branding opportunities we do with our logo. But the biggest way we differentiate the onboard experience from the port is through our people and the relationships that they develop with the guests. That’s really the secret sauce.
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What is experiential retail at sea?
At least 50% of the guests on board are celebrating some sort of milestone. To commemorate the occasion, we suggest private retail appointments or a concierge for store outings. Experiential retail would also be things that are exclusive, like a local artist from Barcelona that comes aboard and hand-paints on silk scarves.
Can you give an example?
One of the funniest things we do is on the Royal Caribbean ships, called the Rising Tide Watch and Scotch event, where guests learn about luxury Swiss timepieces paired with premium scotch as they ascend deck levels. Five ships in the Oasis-class series have something called the Rising Tide Bar that goes from Deck Five to the top. On Deck Five we have entry-level watches paired with reasonably priced scotch. On Deck Six, it’s higher price-point watches and scotch, all the way to the top. It feels like it’s part of the experience, not just retail.
Can you give another example of experiential retail aboard a ship?
Magic mirrors. With magic mirrors you can virtually try on makeup in our beauty stores and it shows exactly what it would look like on your face.
It’s kind of like you’re forecasting what the passengers on the ship will want.
We don’t want stores that look like those at airports. We want highly curated experiences and boutiques for the guests. If they’re going to a beach, the passenger better be able to walk into a beach shop right on the ship and get anything and everything they need.
What are you doing differently this year?
We used to do something that was called marketplace, where we would put out everything from liquor to promo watches, fashion jewelry, handbags, apparel, etc. We’ve taken a step back from that and we’ll be launching pop-ups next month. Each of the pop-ups is themed around a guest experience. One of them might be a night out, so you have your dress, handbag and perfume. Or, one of the pop-ups might be, “Let’s go to the beach.” It’s really about rethinking that innovation on board.
How do passengers pay for retail purchases on cruises?
It’s all cashless. No one on board accepts cash or credit cards. It’s all billed to your stateroom. We charge on your room key (which is connected to your credit card.)
How do you decide what to sell on each cruise?
It’s really making sure we have a deep understanding of who that customer is going to be on board. For example, when we’re in Australia, are there Australians on board or are they from the U.K. or U.S.? We work closely with our cruise line partners one year out to determine who is going to be on board and that’s where we start.
Can you give an example of how this strategy works?
We know our Australian guests like to purchase jewelry, but it’s mostly at a lower price point than we see in other areas of the world. We have to make sure we sort our fine jewelry differently. But if it’s people from other parts of the world sailing in Australia, they are going to want T-shirts that reflect the Sydney Harbor Bridge or they may want to take home a plush kangaroo.
What are some familiar retail brands I’d expect to see on your ships?
For Swiss timepieces, you have everything from Longines to Tag Heuer to certified pre-owned Rolexes. In terms of beauty brands, it’s certainly Lancôme, Estée Lauder and Clinique. We try to make sure that each of the categories has a good, better, best strategy for each of the brands. It’ll have an entry-level price point, a mid-level price point and then a high price point.
How might that work for leather goods on a cruise ship?
We might have $20 to $40 pieces at the entry level. Mid-level might be $200, like Kate Spade or Marc Jacobs. Higher price points might be $600 to $25,000, with vintage luxury handbag and accessory brands from What Goes Around Comes Around, the premier purveyor of fine vintage pieces, or Stella McCartney’s vegan leather handbags.
What did you sell on board for Carnival’s 50th birthday?
A lot of limited-edition things for the 50th birthday merchandise collection that will only be available on Celebration until the end of the year. That collection also featured a special edition Monopoly Carnival-themed game.
What’s the average amount folks spend for retail merchandise on a cruise?
It depends. Every category is different. It could be a $25 T-shirt or a $25,000 piece of fine jewelry. The averages vary a little bit per day by the cruise line and where in the world you are. It goes back to our good, better, best strategy. You’ve got to check the box in every category and make sure you have something for everybody who wants to make a retail purchase.
What’s the most you’ve seen someone spend at retail on a cruise?
Someone spending in the $150,000 range is not unheard of.
How did the pandemic impact retail sales at sea?
It’s no secret — the cruise industry was hit incredibly hard and basically shut down. There was a lot of complexity in trying to get our teams back. We really struggled to get up to staffing levels as quickly as we’d liked. But the good news is, we are now fully staffed as of July of last year.
The cruise lines came back faster than anybody expected. We found ourselves like some land-based retailers, where we didn’t have enough product from a supply chain standpoint. The interesting thing was, guests had a lot of pent-up demand because they weren’t spending money during the pandemic on these types of items. There was a lot of revenge spending on board, especially at the beginning of the year as people started coming back.
How were retail sales on cruise ships hit by China’s closure?
If you put it on average, guests from China spent four times more for on board retail than guests from anywhere else in the world. We’re all waiting for China to fully reopen. That will have the biggest impact on retail overall.