Article · January 1, 2024

Elevating the Travel Retail Experience

The global travel retail industry is growing rapidly. Are brands ready to be more than present and give travelers a rewarding experience?

After years of travel restrictions, Americans are finally taking the trips they have been dreaming of. Despite news of frequent flight cancellations and other travel headaches, Americans are planning more extensive vacations and splurging on travel, even as recession buzz grows. Regardless of whether American travelers are making up for lost time or just really need a vacation, this spending trend is good news for the Travel Retail industry, which is poised for major growth among retail businesses worldwide.The global Travel Retail industry, which was valued at more than $55 billion in 2021, is predicted to grow to nearly $175 billion by 2030.

This includes duty-free shops typically found at international airports, seaports, border towns, and train stations, as well as several “downtown duty-free” shopping stores popular in Southeast Asia where shoppers can purchase perfume and cosmetics, luxury goods, wine and spirits, electronics, food, tobacco, confectionery products, and more.Travel is frustrating at times, and brands have an amazing opportunity to deliver a rewarding and unique experience to those who live for travel. But are brands ready to be more than just present? Travel Retail At A GlanceThe world’s first duty-free airport shop opened in Shannon, Ireland in 1951.

Every plane that crossed the Atlantic from the U.S. had to stop there to refuel, and local caterer Brendan O’Regan greeted travelers with the option to purchase Irish whiskey and mutton. He argued that his air travel customers should have the same tax advantages as cruise ship shoppers, and the government allowed him to open the first airport retail travel store.

Soon after in 1960, Paradies opened its first store in the Atlanta Municipal Airport, ushering in the dawn of American travel retail. Today, most airports contain between 50 and 100 stores, the same number as the average American shopping mall.Most innovative activations are happening in airports overseas. A pop-up at the Amsterdam airport by men’s shave and care line, Tabac, offers a free shave to passersby, whereas Douwe Egberts at Johannesburg’s O.R.

Tambo airport is helping travelers push through their layovers with free cups of coffee for its Bye Bye Red Eye campaign.The Singapore Changi Airport has revamped its retail options and has added eye-catching pop-ups and and exclusive products and concepts for its Changi 1st campaign. The initiative makes novel and immersive retail experiences first available to travelers at Changi Airport—and it’s paying off. A limited-edition of Yamazaki 55 whiskey recently sold at a pop-up for SGD$760,000 (US$550,000).

Europe and Asia lead the travel retail industry when it comes to luxury brands. Large international hubs, like the Zurich airport, boast a large selection of luxury branded shops, from Bulgari and Rolex to Hermes and Gucci and more. The Istanbul Airport is home to Luxury Square, a store featuring 28 top international luxury brands under one 800-square-meter concept.

Brands include Burberry, Marc Jacobs, Dior, Saint Laurent, and much more.The most innovative luxury beauty activations can be found across Asian airports. In Bangkok, motion sensors and a virtual lip trial app using AR take customers on a journey to explore Nars lip colors. Guerlain used gamification to engage travelers with a WeChat game that can only be played at the Beijing Capital International Airport to win a free tube of lipstick at the duty-free shop.World-class travel experiences in the U.S.

are happening, but not at a competitive pace. Product-focused innovations, like snack and candy products, are dominating domestic travel retail. M&M’s is investing in their digital displays to promote new M&M candy bars and continue building on their international travel retail experiences.

Also popping up are beauty vending machines by brands like Benefit and Essie, who are offering a little luxury on the go.On The HorizonTravel retail is positioned for growth as burgeoning brands use the channel to get in front of new shoppers. How can brands differentiate themselves in travel retail? Here are some trends and inspirational examples of brands rising to meet the future of this growing industry.

Go Big, Spend Big – Expedia is calling 2022 the year of the GOAT, or “greatest of all trips,” after their survey of 12,000 travelers in 12 countries found that 65 percent of respondents are planning to “go big” on their next trip. Bucket-list destinations are trending, and travelers are making up for time lost to the pandemic. Increased traffic in airports means travel retail outlets will see a boost to their bottom line if they deliver a customer experience that resonates.