Italian cities enjoy traffic uplifts from ‘tourist shopping’

by ShopperTrak on 26-11-19

Tourist shopping is influencing European travel choices and creating lucrative opportunities for local retailers. We’ve looked at our data to see how Italy is benefiting from tourism-related retail traffic uplifts – described as a ‘gold mine for Italian cities’ according to the latest Shopping Tourism Italian Monitor.

The report states that shopping is one of the main reasons for tourists to visit Florence, Milan, Rome, Turin and Venice.

It’s estimated that 1.5 million tourists choose to visit these Italian cities each year with their first motivation being to hit the shops. They spend on average 110 euros per day, with 60% of purchases being for clothing items, followed by accessories and leather goods (17.3%) and cosmetics and perfumes (3.6%).

Italy’s celebrated luxury brands including Gucci, Giorgio Armani, Bottega Veneta, Versace and Moschino are greatly desired by international visitors, and Bain & Company’s latest study confirms that tourism spending on luxury personal goods is increasing in Italy, fueling the 6% year-on-year growth predicted for 2019 in overall luxury spend.

Growth is partly the result of a rise in European tourism, “which is picking up this year despite socio-political turmoil in countries like the United Kingdom and France,” said Claudia D’Arpizio, a partner with Bain & Company in Italy. Chinese spend is also a big factor.

Massive draw of designer malls

While the biggest tourist draw last year, according to Business Insider Italia, was Rome’s Colosseum, with seven million visitors, the second most visited site was the Serravalle Designer Outlet near Milan, owned by McArthurGlen. Europe’s largest shopping outlet attracted an incredible five million visitors.

In Tuscany two further ‘shopping villages’ attracted about three million people each, eclipsing the Renaissance art-works of the Uffizi gallery in Florence, viewed by 2.2 million, and the Michelangelo sculptures at the Accademia, visited by 1.6 million.

Beyond Italy’s specialist designer outlets, tourists have easy access to luxury brands on iconic shopping streets such as Milan’s Via Monte Napoleone and Rome’s Via Condotti, as well as provincial boutiques and showrooms in hotels.

So, when does tourism shopper traffic peak and how can Italian retailers make the most of the opportunity?

Our retail traffic data analysis for Rome and Milan confirms that July is one of the biggest shopping months with traffic increasing by at least 40% when compared to June. There is also a big peak in Rome and Milan in the winter months of December and January when Christmas shopping and the winter sales are a big pull for local shoppers and international visitors.

No room for complacency

Possibly due to economic and political uncertainty our data reveals that the month-on-month increase in July traffic has slowed somewhat over the past few years. Year-on-year there have been declines in July traffic in both Rome and Milan; for the past two years traffic has been down 7% in Rome. Milan traffic was down 6% in July 2019 and 3% in July 2018.

However, traffic is still significantly higher than June, confirming the ongoing importance of tourism shopping.

The challenge for retailers in these and other Italian cities is to attract international tourists into stores and then ensure sales assistants, stock availability and service levels are all optimised for conversions.

Retailers are using sales and traffic data to tailor their merchandising mix to meet the needs of specific visitor nationalities at the point of the year when they visit in large numbers. It’s imperative at these times to stock the desired product ranges, to have well trained store teams on hand to serve and sell, and to facilitate a host of international payment options so that sales aren’t lost at the final point of purchase.

Tailor to international audiences

While Spain and France are thought to attract the most foreign travellers in Europe, Italy is a close third. Figures from the Italian Government Tourist Board reveal 94 million tourists spent a total of 216 million nights in Italy last year. The figures, which only looked at European nations, showed that the highest number of EU tourists came from Germany, followed by France, and the UK was third. Visitor numbers are also being boosted by the burgeoning Chinese tourism market.

Challenges to come

Looking ahead there are issues that may curb shopping tourism in Italy, which retailers need to be aware of. An anti-tourist movement is growing in some of the country’s most crowded beauty spots, including Venice. There have been protests against cruise ships with local residents objecting to extreme overcrowding in the peak summer months.

The Italian government has also said it aims to promote smaller destinations and authentic craftsmanship, gastronomy and wine tourism as a way of better dispersing visitors and revenues.

Opportunities for retailers in Italy to benefit from tourism spending are very real but clearly evolving. With people counting technology and the ability to analyse historic and real-time footfall data, it’s possible to build a clear picture of where and when to be ready for eager international shoppers. Italian retailers that use these insights to be adaptable, flexible and nimble, are those most likely to succeed.

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