Airport Retailers Flying Onward and Upward
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CNN recently released a news report covering the impressive performance of retailers with brick-and-mortar locations in airports. What’s more, it’s only clear skies from here.
“Global travel revenue, which includes duty-free sales at airport stores, has tripled over the past 15 years to $69 billion in 2017, according to the Boston Consulting Group,” says Nathaniel Meyersohn with CNN.
In today’s changing (and challenging) retail sector, why are these businesses outperforming? Some suggest it might just be the right place at the right time. “Travelers have an average of 56 minutes of free time before their flights and typically spend 25 minutes shopping in duty-free stores, NPD Group estimates,” says Meyersohn.
In other words, airline travelers are captive audiences who are willing to spend if it means several minutes of retail entertainment during an otherwise mind-numbing layover. Other prospective shoppers are prepped to spend before a flight simply because they’re in a good mood for their impending trip.
"Travelers are in the right mindset," said Montgomery Wilson, head of global travel retail for Brown-Forman (BFA). "They are on holidays and they are open to discover and explore new things."
Unfortunately, not just any business can set up shop next to the tarmac. “Over the past decade, the number of companies vying for square footage in the airport retail arena has increased exponentially, which has in turn made the space extraordinarily competitive, according to Brian Levin, VP of sales and co-founder of Swyft,” says Lara Ewen with Retail Dive.
There’s still room for retailers to expand overseas, particularly in China. “China’s duty-free market is still largely underdeveloped despite consumers fondness for buying premiums goods at duty-free stores,” says Yiling Pan with Jing Daily. “Morgan Stanley’s statistics indicate China represents just eight percent of the global duty-free market, but its consumers accounted for a third of global duty-free sales in 2018.”
However, there’s more work put in than securing right location; airport retailers are still using the space to test new ideas and add scope to their label. "Each of them [airport retailers] has an expanding brand portfolio," says Stacy Moore, an airport food and retail consultant. "You are now seeing stores like Victoria’s Secret, Vineyard Vines, Kiehl’s, Eddie Bauer, [and] Life is Good, along with the usual high-end sunglasses and jewelry."
This month, Paradies Lagardère, one of the most well known travel retailers, announced plans to open 14 new stores in Cincinnati/Northern Kentucky International Airport alone. Marshall Retail Group also confirmed that it would open its first POP SOX store at Sacramento International Airport. The new concept will offer “sassy, sarcastic, and colorful graphics,” which is the perfect trio for shoppers looking for personalized, last-minute add-on souvenirs before the final boarding call.
If airport retailers are going to maintain their altitude over other companies in the coming years, fresh strategies are still going to play an important role for attracting consumers. “Airport retailing will need to be flexible to support ever-changing passenger demands and provide refreshed travel experiences by employing showcasing and pop-up concepts,” says Chris LeTourneur, President and CEO of MXD Development Strategists.
Are you ready for customers to fly through your business’ front door as well? Purchase your affordable and fashionable apparel, accessories, and footwear at the next OFFPRICE Show in Las Vegas, August 10-13 at the Sands Convention Center. Registration is now open online.