With steaming pots of tea and tiny glossy cakes, iced in distinctive Tiffany blue, high tea on a World Dream cruise liner is now a jewellery sales event. It is one of a growing number of experiences introduced to ships in recent years by cruise operators seeking to win more custom from their passengers.

The cruise industry is in rude health. Nearly 27m passengers set sail last year, according to the Cruise Liners International Association, with the 2018 figure expected to reach 28m. Passenger numbers have risen about a quarter over the past five years. The average passenger is aged 47 — a little younger than the retiree cruiser stereotype — and they like to shop.

With duty-free savings to be made and plenty of time on board to kill, retail has always been an important element of cruises. Last year, watches and jewellery accounted for 24 per cent of total retail sales aboard cruise ships, according to analyst m1nd-set.

This sales channel is becoming more sophisticated as brands including Breitling, Chanel and Chopard set up boutiques on a range of routes from the Caribbean to Alaska.

“While land-based retail is suffering from internet competition, cruise retail is thriving,” said Beth Neumann, chief executive of cruise ship retail operator Starboard (which devised the Tiffany & Co afternoon tea package) in a strategy statement this year. The group, owned by LVMH, announced plans to expand its empire to sell 750 brands across 90 ships by 2020. “The cruise industry has upped its game in creating ships that rival the imagination and it’s vital that our retail experience does the same,” she added.

Hublot’s retail space onboard © Poncho Mendoza

While stores aboard liners have what might be considered a captive audience, they do have competition from the shops that cluster around the ports where the ships dock. These outlets focus on discounting. Where once the cruise ship stores would try to compete with them on price, and to an extent still do, there has been a shift towards grabbing consumer spending via experiences and interactive sales events rather than through cost savings.

“Cruise retail has shifted from the ports, when there was a short time to decide and aggressive promotions, to onboard shopping, where there is much more chance to immerse the shoppers in the brand experience,” says Eddie LeVian, chief executive of US jewellery brand LeVian.

Known for its chocolate-coloured diamonds, LeVian is part of a retail initiative launched by Starboard on one of Carnival Cruise Line’s ships.

The concept is focused on creating personal shopping events, which include LeVian’s “Style Me Famous” sessions, where its sales staff dress guests up in jewels, encourage them to pose for photos and give them a gemstone gift — a cushion-cut chocolate quartz worth $100 — in the hope that they will decide to pay $99 to upgrade to quartz earrings valued at $199.

Cruises enable retailers to create a “memorable buying experience in the age of internet shopping”, says Mr LeVian. “We see the future of retail being defined in this fast-paced environment where storytelling [can be] fine-tuned and flexibility is built into the store model. The LeVian store of the future will be born on a ship.”

Like other brands selling on the seas, Hublot is rolling out experiences to capture shoppers’ attention. It sends watchmakers on cruises to run seminars where guests can, for example, assemble a watch movement.

Inside Hublot’s retail space © Poncho Mendoza

Richard Guadalupe, Hublot chief executive, says his luxury watch brand was the first to invest seriously in cruise ship retailing in 2013 and has seen strong sales growth in the sector in recent years. “Cruise retail has become much more professional, with companies trying to maximise revenues onboard rather than in the ports,” he says. “It is not the small souvenirs or gadgets any more, but a full range of products, including luxury items.”

For many years, shopping in the Caribbean — one of the regions where Hublot sells aboard ships — was all about grabbing a bargain, Mr Guadalupe says. “But with the overall experience going more luxury, price is not the only topic any more. It’s all about enjoying the holidays and indulging.” Some passengers view a luxury watch, one that is also perhaps exclusive to the ship, as a memento of their trip, he adds.

Not everyone is happy about cruise liners’ shift away from price wars with ports, however. Atelier Swarovski, which sells through Starboard, says this new focus is dulling sales at sea and fewer “companies are offering discounts, which has slowed the onboard retail business”.

MSC Cruises carried 1.97m passengers last year and says it has the largest in-house retail operation at sea. Watches and jewellery account for as much as half of sales on some routes, according to head of retail Adrian Pittaway. He admits that shoppers’ ability to compare prices online and aggressive discounting in ports means prices onboard still need to be competitive. But he says there is growth potential in spending quality time with shoppers.

“Experience is at the heart of cruise retailing,” says Mr Pittaway. “As our ships get more innovative, more creative and more expansive, so too must we develop our experiential element of retailing so that it is a holistic part of the [wider] cruise experience. “In future, the whole ship can be a shopping experience — that is our vision.”

Inside Hublot’s retail space © Poncho Mendoza

MSC plans to launch 13 luxury liners between 2017 and 2026 as part of an €11bn investment programme. Many other cruise ship operators have similarly ambitious plans.

Serial entrepreneur Sir Richard Branson will enter the fray with the launch of Virgin Voyages in 2020. The retail contract for the venture’s first ship — The Scarlet Lady, an adults-only vessel with luxurious interiors — has been handed to Harding Retail, which currently operates 250 stores on 62 ships.

Kat Florence will be one of the jewellers on board. Ms Florence has already found success on the high seas — she sold a $250,000 gold necklace set with diamonds and a rare zultanite gemstone on board another ship in April. She has been charged with designing “an incredible mermaid jewel to mascot the boat”.

Virgin Voyages has vowed to disrupt the market by targeting fashionable well-heeled passengers who would never have dreamt previously of setting foot on a cruise ship.

The bigger challenge will be getting them to open their wallets.

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