Travel Retail Attractions
Travel gives the traveller an opportunity to experience the culture of a place, and retailers have taken the opportunity to showcase their local cultures in the prime real estate of international airports. You can get a taste of what China has to offer at Beijing Capital International Airport, with something from each of the top duty free categories that has a distinctly ‘Chinese’ feel to it. In this regard, someone travelling from London to Sydney through Kuala Lumpur in Malaysia might want to buy some memoirs, accessories and uniquely Malaysian trinkets as mementos of their trip through that country.
Why Beauty Products?
Why is it, then, that with anything from 1 to 48 hours to kill at an airport, perfumes and other beauty products are topping the list of travel retail sales? Why not books, magazines and movies for example? Well, one of the main attractions of airport shopping is the discount that one gets by not paying duty and / or taxes, thus consumers will be getting something of a bargain by buying while travelling. This depends, of course, on the destination country’s customs regime, as one might be required to declare goods bought from outside the country when they arrive.
Beauty products also have an air of exclusivity around them. Not everyone can buy goods at the airport, you must be a traveller, and only less than a tenth of the world’s population travels internationally every year. This niche group of travellers, then, has an exclusive place unique to them, where they can buy brands that are perfectly aligned with exclusivity.Perfumes are also perfectly aligned with the travel lifestyle. Historically, perfumes were carried on long journeys as part of a traveller’s freshening-up kit, and also, to mask natural odours that undoubtedly may engulf a traveller on a long journey. Perfumes, then, are an essential part of a person’s fashion elements. Perfumes are your invisible clothing, and just as fashion elements are essential for one’s journey, they also allow you to express your individuality. In 2014, beauty products accounted for the largest travel retail segment, with over 30% of all travel retail purchases being beauty products, and mostly, skincare and women’s fragrances.
The Future of Travel Retail
Travel retail floor space is also expected to experience a significant upsurge due to infrastructural development projects such as airport expansion projects and new airport construction projects. In the year 2017 alone, over US$ 255 billion was being invested in new airport projects globally, with another US$845 billion being spent on renovations, airport expansions and non-greenfield projects. This is all in anticipation of a higher level of global travel and will go a long way in promoting the sustained development and growth of the travel retail industry for the foreseeable future.The global travel retail industry has been on a continuous upward trend since recovering from the global financial crisis of 2008-2009, and the growth continues to be exponential. It is anticipated that the growth trend will continue, as emerging markets are expected to contribute to the growth of the travel retail industry with more air travel in the developing markets’ emerging middle class consumers. As the market size of this industry grows, the level of competition within the industry is also expected to increase, and retailers may invest more in enlarging their travel retail presence.