While malls are shuttering and retail stores are being eaten alive by Amazon, there is one holdout where retail is still thriving: airports.
Consider that global travel revenue, which includes duty-free sales at airports, has more than tripled since 2000, rising to $69 billion in 2017.
- The rise of budget and low-cost airlines
- Two billion travelers flew in 2002; four billion flew in 2017
- Travelers average 56 minutes of “free time” before their flights
- On average, 25 minutes of that time is spent shopping in duty-free stores [I find this hard to believe…how about you?]
- In the Asia-Pacific region, retails sales have averaged a 14% annual growth since 2002
Those statistics are frankly startling and are prompting big names to invest in their airport presence.
Big brands like Moncler, Jack Daniel’s, Colgate and Estée Lauder are expanding their footprints in airports around the world to get travelers to buy impulsively while they wait around for their flights.
Earlier this month, Colgate bought Filorga, a luxury anti-aging skin care brand that has become a big player in airports. Colgate CEO Noel Wallace said the brand would help Colgate enter the “fast-growing and sizable travel retail channel, particularly in Asia.”
CNN caught up with Montogmery Wilson, the head of global travel retail for Brown-Forman, a company whose portfolio includes Jack Daniel’s whiskey and Woodford Reserve bourbon.
Travelers are in the right mindset.They are on holidays and they are open to discover and explore new things.
That..and the fact it is one of few places where brands truly have a captive audience. And that has spurred innovation…or at least gimmicks. For example. Jack Daniel’s now has a special airport-only line called “Bottled-in-Bond”.
More Than Alcohol
And of course it is not just alcohol.
Estée Lauder CEO Fabrizio Freda said, “Travel retail is, to me, the most exciting channel,” said in May. The key with Estée Lauder, like most companies, is simply to hook a customer in for the first time…then they keep buying. Estée Lauder estimates that 59% of its “first-time” customers purchase products in airports.
Thus, Estée Lauder is pouring in research and development into expanding that market. In Korea, it is testing in-seat delivery on a passenger’s flight, though I would think a customer would want to take the product with them directly from the store.
Even Brookstone (yes, I too was surprised to learn the chain is still alive) is still sputtering on in airports. When Brookstone filed for bankruptcy last year, it closed all 101 of its mall stores. But its 35 airport stores were kept open and remain open.
I never thought retail would totally die, but I am surprised it has continued to flourish in airports. I just returned from a quick trip around the world and frankly I never saw the high-end brand stores busy as I passed through East Asia and Europe.
Do you go shopping at airports?