With the evolution of air trafic and consumers looking for experience, Travel Retail seems to be the new trend in the luxury market for the years to come.
By Marguerite
With the growth of air trafic, Travel Retail seems to be the new trend of luxury market. Indeed, in 2017 more than 3.5 billion travelers took the plane worldwide, a 7% evolution compared to 2016. Moreover, travelers consume more and more. An increase of 7% per year of airport trade. Luxury goods represents 6% of this trade. According to Generation Research and the European Travel Retail Confederation, duty free and travel retail sales should reach 120 billion USD in 2025.
A specific consumption
Travel retail presents specific characteristics rankhaya.com. Consumers habits are not the same in travel places than in their daily life. First, they have a limited amount of time. In average, a traveler have 30 to 45 mins , depending of the place (airport, train station…). Secondly, they have specific needs. In general, travelers seek transportable goods, souvenirs, gifts for their close relatives. Therefore, perfums and cosmetics are the leading products. They represented 30,7% of the trade in 2017.
Travel Retail reinvents itself
Thus, luxury is not a prirority. Brands have to adapt and reinvent themselves to attract consumers to buy premium goods. The positioning of luxury brands is changing. Before, the objective was to offer entry-level products only. Today, luxury consumers want experience, this is why Travel Retail must offer high-quality products and services. For exemple, Kering Eyewear developed Gucci glasses collection available in travel retail only.
What’s next ?
Consequently, the evolution of this specialized trade is going to encourage brands to develop their digital strategy with new numeric options. Concerning consumers, Pacific Asia, according to ACI World Airport Traffic Forecast, should represent the most important increase in the sector. Indeed, Asia has experienced a tremendous economic growth for the past few years and luxury consumers are mainly asian people. In addition, travel retail strategies will focuse on millenials. This young generation, between 18 and 25 years old, are huge luxury consumers and looking for experiences.
