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Some $eXXXy numbers:
- 1 billion - the number of people who travel internationally each year (=15% of the global population)
- $1 trillion - how many dollars they drop doing so
- $60 billion - amount sold in 2013 by travel retailers - ie. airports, ferries, airplanes & at border crossings
- 73% - amount that sales at airports are predicted to grow by 2019
- 12% - increase in travel (airport) sales annually since 2009
Where is all this well-heeled wanderlust coming from? Two places:
- more travelers - particularly from emerging markets like China;
- more desire on the part of those en route to somewhere to shop along the way.
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"International tourism continues to rise above expectations despite continuing global geopolitical and economic challenges," explains the Deloitte report Global Powers of Retailing 2015. "The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting sales, especially of luxury products, and this is benefiting the developed economies of the U.S. and Europe. Over half of France’s 16 billion Euros luxury industry depends on tourists. Therefore, in 2015, expect retailers to continue catering to high-spending travelers, especially emerging market tourists, to drive growth."
A big reason for all this big spending is what happens when a passenger finally gets past the security checks and has time to kill waiting for a flight. Feeling "at loose ends", these relatively prosperous types are up against airport retailers, who have a two-part secret weapon.
#1 Travel retailers know the flight schedules so unlike high-street shops, they have advance warning when customers are coming.
#2 They know where the travelers are going, so they know their shopping habits.
Knowing when people are arriving plus what they want to buy allows travel retailers to tailor both their staff and merch accordingly. "They can plan for Chinese women in search of moisturizers or an influx of brandy-sipping Nigerians," explains The Economist, anticipating the morning flights to Barbados by stocking the cognac "gondola" with Courvoisier or Hennessy and then switching those out in the afternoon for cheaper brands, when there are flights scheduled to Norway and the US. "Shop displays can be reconfigured to suit national tastes." And cultural sensitivities. "Brazilian women are happy to have a perfume spritzed on their bodies," continues The Economist, but "with the Chinese you use a tester."(illustration)
The element of discovery also looms large for on-the-move shoppers. When the L’Oréal Group's Travel Retail division surveyed more than 10,000 passengers at 15 different airports, they discovered that the main reason people headed for duty free wasn't price but selection: to find items they couldn't find elsewhere. Research by JCDecaux confirms that for at least every 8 out of 10 new travelers, shopping is considered integral to their overall travel experience; in fact, a whopping 82% of the Chinese travelers surveyed agreed that when on the road, their priority is shopping. "Shopping is becoming an increasingly relevant component of the tourism value chain,” says Taleb Rifai, UNWTO Secretary General. “Shopping has converted into a determinant factor affecting destination choice, an important component of the overall travel experience and, in some cases the prime travel motivation.”
This desire-to-spend at a travel hub meets readiness-to-sell adds up to what has been dubbed the "golden hour", and it is indeed raining gold for companies like L’Oréal - whose impressive roster of beauty brands includes Lancome, Biotherm, Shu Uemura, Maybelline, essie, Kiehl's, Carita, Decleor, Urban Decay & Yves Saint Laurent. As makeup and perfume have eclipsed tobacco and booze as the biggest-selling category, this "travel retail" as morphed into one of the three biggest markets, earning it the title of the Sixth Continent.
A place, you'll remember, teeming with more than a billion people who intend to spend-Spend-$pend.
- Lesley Scott
(image: Todd Heisler/The New York Times)
NOTE: This post was about trends that define the Supremium fashion tribe - spendy, style-conscious fashionistas that enjoy jetsetting, globetrotting and shopping their way across the globe. To learn more about each of fashion's four mega-tribes that I track, START HERE.
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