How will AI transform cruise retail into something truly amazing?

Adrian Pittaway
6 days ago
8 min read

**MEIN SCHIFF FLOW IN CONSTRUCTION (Image: TUI)**

We are on the cusp of an industry transformation. AI is going to change the cruise retail experience in the most positive way possible into something truly amazing. The future will be a hyper personalised human-centric one. And in this article I will explain how!

The cruise industry is currently experiencing a truly remarkable resurgence and expansion, poised for significant growth in the coming years. Projections indicate that 37.7 million passengers are expected to embark on cruises in 2025, contributing to a market size anticipated to grow from $55.4 billion in 2024 to $85.2 billion by 2033, demonstrating a robust compound annual growth rate (CAGR) of 4.9% (read more on this in another post)

This vibrant sector is increasingly appealing to a diverse demographic, with Gen-X and Millennials leading the way, drawn by the variety of experiences, inherent value, and the unique opportunity to visit multiple destinations within a single trip. Beyond the allure of itineraries and onboard amenities, the cruise environment presents a distinctive ecosystem ripe for retail innovation, particularly thinking about AI.

STAR OF THE SEAS (Image: Royal Caribbean)

Unlike traditional land-based retail, cruise ships offer an unparalleled captive audience, with passengers experiencing extended dwell times typically ranging from 7 to 14 days. This prolonged engagement fosters a unique "holiday sense of place," which profoundly influences purchasing decisions. Data indicates that 92% of travellers anticipate shopping when away, and their spending habits onboard are notably "bucking wider shopping trends". This suggests a resilient and eager consumer base for onboard retail, distinguishing it from the broader retail landscape.

Cruise ships are simply perfect shopping spaces of the future! The extended time and relaxed atmosphere cultivate a psychological state highly conducive to discretionary spending and emotionally driven purchases. This makes cruise retail uniquely positioned to capitalise on a guest who is not only receptive but actively looking for unique items or souvenirs that enhance their trip or serve as memorable keepsakes. This emotional connection to the holiday experience often translates into less price-sensitive decisions and a greater openness to engaging "brand theatre" and exclusive offerings.

Therefore, successful cruise retail strategies now and looking forward must deeply integrate into this emotional, experiential aspect of the holiday, moving beyond mere transactional efficiency to create memorable shopping moments that resonate with the passenger's celebratory mood. As guest expectations continue to evolve and rapid digital transformation accelerates across the broader retail landscape, cruise retail finds itself at an exciting crossroads, poised for significant innovation.

The next wave of advancements will fundamentally reshape how passengers shop onboard, transitioning beyond conventional duty-free models which we have followed for the past 50+ years to embrace hyper-personalised, immersive, and ethically conscious experiences that seamlessly integrate with the overall holiday experience. Specifically let's delve into how Artificial Intelligence (AI) will transform cruise retail into a hyper-personalised experience.

It's important to start this argument by saying loudly and proudly that the future of cruise retail will remain firmly people-centric, and not digital-centric. The human connection, the personal touch, the amazing environment will be core to the success of the business model, not simply an "after thought". But at the same time, AI-driven personalisation is transitioning from a novel concept to a fundamental expectation for consumers across all retail sectors. And particularly in the cruise industry, when the 'end-to-end NPS positive experience' of the cruise is becoming ever more important, cruise lines will expect cruise retailers and brands to adapt to the 'new normal' using AI to further enhance the guest journey.

MSC LOGO SHOP (Source: MSC Cruises)

Within the unique context of cruise retail, this need to provide a more personalised, longer lasting positive experience will translate into a profound transformation, moving beyond generic offerings to tailor every facet of the shopping journey to individual passenger preferences, purchase history, and real-time behaviour.

IS IT THE END FOR THE TRADITIONAL DAILY PLANNER?

Artificial intelligence will play a pivotal role in achieving this new level of customisation. Advanced AI systems can leverage deep learning to quickly analyse vast amounts of guest data, including demographics, past travel behaviour, activity choices onboard, and previous purchases, to build comprehensive, dynamic individual customer profiles that do not simply fit into the traditional 'gen x / baby boomer pigeonholes'. This individualisation enables real-time product suggestions and dynamic pricing strategies, which not only optimise revenue for cruise lines but will also significantly enhance guest satisfaction. These systems can analyse historical booking patterns, seasonal demand fluctuations, and competitor pricing to adjust onboard retail offers in real-time, ensuring optimal value for both the consumer and the cruise line. Furthermore, the days of announcements, flyers, cabin drops, those huge paper daily programs (see above) will soon be over! AI chatbots and virtual stylists will offer totally custom product suggestions, recommend outfits, and even anticipate future purchases based on these insights totally individually. For instance, Royal Caribbean's Royal IQ app already leverages AI to curate personalised recommendations for activities and shore excursions, a model that could be seamlessly extended to retail for tailored product suggestions, creating a cohesive experience.

Beyond sales, AI-powered chatbots and virtual assistants will provide instant, round-the-clock support for enquiries, bookings, product availability and even ship navigation. Just imagine the humble trunk show curated with AI enhancement! This amazing capability extends to pre-purchase queries, detailed product information, and post-purchase support within the retail environment. All of this can reduce the workload on the limited headcount team and ever changing retail crew and ensure consistent, accurate, immediate information for passengers regardless of the status of onboard operations.

The impact of hyper-personalisation on cruise retail is transformative. It fundamentally shifts onboard shopping from a mere 'value based' transactional activity into a curated, highly relevant service. This approach makes shopping feel less like a sales pitch and more like a personalised recommendation, which significantly will enhance customer loyalty and boosts revenue for the cruise line.

AI, in this context, acts as a unifying intelligence that connects disparate data points to construct a truly seamless, predictive, and personalised customer journey across all onboard services, including retail. For example, if an AI system tracks a passenger's dietary preferences from dining reservations, their preferred activities like adventure excursions versus spa treatments, and their past onboard purchases, it can infer lifestyle choices and seamlessly recommend highly relevant retail items, such as specialised activewear for adventure seekers or gourmet culinary tools for food enthusiasts. Imagine tasting a new artisan whisky in the observation lounge on deck 16, and AI reserving you a personalised bottle and then guiding you seamlessly to the retail store with a special offer and a special gift, curated just for you! This opportunity creates a holistic, predictive, and proactive guest experience where retail recommendations feel like a natural, value-adding extension of their holiday, rather than an intrusive 'in your face' sales attempt, which as we know has always been a significant challenge for onboard retail teams to overcome.

This level of personalisation is becoming a core expectation, with projections indicating that by 2028, consumers will spend $32 billion via AI agents that run independently on their smartphones to programmatically shop for goods and services. With 90% of retail tools projected to embed AI algorithms by 2026 , cruise retailers must strategically leverage this technology to differentiate themselves and meet rapdily evolving consumer demands for tailored experiences. By deploying advanced chatbots, AI can not only answer FAQs, provide personalised product information, guide passengers through the cruise, and even assist with purchases or post-purchase inquiries 24/7, they can also be the ultimate personal shopper. Virtual stylists, powered by deep learning, can recommend entire outfits, new liquor recommendations, personalise logo merchandise based on guest tastes or even create personalised recommendations to be shown exclusively for their guest at upcoming onboard events such as fashion shows, tastings or seminars.

However..... Business Models will need to be Adapted

Does this all sound truly amazing, and honestly it could be too good to be true!

To fully capitalise on the power of AI in cruise retail, brands and retailers must strategically adapt their business models. I see 4 key things that have to happen. This involves a multi-faceted approach that integrates AI across various operational and guest-facing touch points:

Unified Guest Data Platforms: One of the first and foremost adaptations that will have to happen to make AI work onboard is unified data sharing. Retailer systems must connect and interact with cruise line systems to ensure that the AI can use and interpret the vast amounts of data correctly in order to hyper-personalise. This will require a huge amount of change management, not only from an IT side but also from a traditional 'silo' mentality that has existed in the industry. Not only this there will be an infrastructure challenge with vast differences between new smart ships, and the traditional legacy ships. Remember, cruise ships can last 30+ years, so many are still not fully enabled with the latest technology environment.
AI-Powered Recommendation Engines: Secondly. for AI to work effectively in cruise retail it must move beyond basic "customers who bought this also bought..." to sophisticated engines that connect directly into other data points such as the cruise plans, itineraries and use these to suggest products based on a passenger's real-time context, weather, excursions etc. For instance, an AI could recommend specific sun protection and swimwear for a passenger booked on a private excursion to go snorkelling as the weather forecast changed in the last hour, or a beautiful new necklace just received onboard could be recommended when a guest receives a surprise invitation to dine at the Captain's table. All of these require AI to be thinking much more than just typical retail recommendations.
Empowering Digital Store Associates: Thirdly, cruise retailers will need to equip, empower and train their onboard staff with the same AI assistant information to ensure a seamless experience. These tools need to provide real-time access to guest profiles, inventory levels, and product details, enabling staff to offer highly personalised recommendations, upsell intelligently, and create seamless cross-channel experiences without showing any sort of 'them and us' mentality. This has the potential to elevate the 'people-centric' magic of cruise retail to the next level.
Dynamic Inventory Optimisation: And lastly, AI algorithms will need to analyse and predict demand fluctuations, to optimise inventory levels, and automate procurement, ensuring popular products are always in stock. As we know, in cruise retail, availability is everything - it can make or break an experience, so it has to be optimised. The 'Just In Time' nature of cruise retailing can be really enhanced from a cash flow and stock holding perspective using AI to support and manage effectively. But not only this, it can also provide a better guest communication flow. For example, AI could anticipate that the delivery expected in Barcelona has been delayed due to an accident on the motorway and therefore provides an alternative recommendation. A negative becomes a positive easily. Using integrated stock management and information sharing allows AI to really provide real-time transparent information to their guest

Cruise retail has the opportunity to become the most extraordinary AI-enhanced hpyer personalised experience. One which is proactive, individual and curated to suit every guest's different needs and wants. At no point will AI replace the human-centric nature of cruise retail, but it really can enhance it substantially.

By embracing these adaptations, cruise retailers can move beyond traditional transactional models to create a truly hyper-personalised shopping experience that feels like an organic, value-adding extension of the cruise vacation, fostering deeper loyalty and driving significant commercial success.

So, if you are inspired by all of this, and as a brand or operator you are thinking of entering, or expanding into the cruise industry, this blog shows that there has never been a better time to consider expansion. But it's not easy! We are here to support you become 'Ocean Ready' with expert guidance on how all this information is relevant for cruise retail and the specific areas you should be focusing on. Please visit my consultancy website or our corporate page to see the unique services the Cruise Retail Academy can offer you to help take part in the strong potential of the global cruise retail business. Let's sail together!