t’s fair to say that the world has seen a lot of change in the last few months. So, it’s no wonder that there are worries about how events are going to play out in travel retail. But while it’s easy to opt for doom and gloom, we think there are three great reasons to be cheerful about travel retail right now.
Despite all kinds of economic challenges, this is an industry that’s seen enormous growth in the last few years. It was valued at an impressive $63.5bn in 2014, but is predicted to grow to a stonking $84bn by 2020! It’s interesting to take a look at what’s caused this major growth: “The fragrance and cosmetics category is the main driver of growth globally and its sales were up 7.8% in the first quarter, while sales of wines and spirits were up by 4%.”
Airport as experience
While it’s easy to assume that in more volatile times, travellers will be more frugal, this is not the reality. People are turning more and more to airport travel as an experience, a stopping point for luxury and treating themselves. It’s about airport travel as experience, not just for duty free, as this excellent Econsultancy article on the rise of beauty brands in travel retail points out: “The appeal of shopping at airports used to centre around the concept of duty-free –the fact that consumers might bag a bargain on the way to Majorca or Marrakech. Now, it has become so much more, with travel retailers cottoning onto the fact that airports can provide a shopping experience to rival the biggest malls in the world.”Just look around at all the new brands and products being launched at various airports around the globe. Look at new ventures like the very first salon blow dry express bar at the arrivals terminal at London Heathrow. Whether it’s whisky or confectionery, travel retail is being recognised as an exciting opportunity by all kinds of great brands.
The news that the government supports a third runway at Heathrow is not without its critics. But whatever your view on it, you can’t deny that the move shows a commitment to travel and business which is surely good news for all of us. The expansion is anticipated to bring “economic benefits to passengers and the wider economy worth up to £61bn ($74.6bn). Up to 77,000 additional local jobs are expected to be created over the next 14 years”.
Yes, it’s controversial but we think it’s a sign that the government is committed to supporting the travel industry and the businesses within it. Which is another great reason that travel retail is on the up.