The hustle and bustle of airport terminals fell silent over the past year and a half and many of us missed the opportunity to travel the world. The drastic fall in airport traffic also hit beauty brands from Clarins to Estee Lauder as much of the holiday sales they would expect to make through travel retail were not to be.
As beauty currently makes up more than 37% of the global travel retail market, reports show that in 2019, the travel retail channel’s share of all global beauty sales amounted to 8%. This slashed in half to 4% in 2020. And, unlike traditional retail, travel retail had no digital back-up plan.
As international travel gradually continues to open up, now may be the perfect time for both brands and consumers to prepare for a return to travel retail. Here’s how brands can maximise their gain and consumers can scoop some perfect buys ready for a return to holidaying.
The demise of travellers has hit traditional and luxury beauty brands hard. L’Oréal’s chief executive officer Jean-Paul Agon cited the closure of airport stores as one of the main reasons for the company’s 19.4 percent decline in sales to 5.85 billion euros in the second quarter and Estée Lauder reported global travel retail declined less than 30 per cent in recent earnings.
Travel retail has been a steady growth point for beauty brands over the past 15 years, with global revenues tripling to $69 billion by 2017, according to the Boston Consulting Group. According to market research, perfumes and cosmetics represent the largest share of the travel retail market, at 31 per cent.
However, despite this steady stream of sales, the pandemic has exposed the beauty industry’s apparent over-reliance on the travel retail sector, especially versus direct-to-consumer brands that flourished during this time due to dynamic digital shopping experiences.
“We live in an omnichannel world so it’s never smart to be overly reliant on one channel,” said Scott Clarke, VP and consumer products industry lead at Publicis Sapient. “Historically, people chose to buy duty-free for the price and convenience, but that has been usurped by the improved convenience that you get from shopping online.”
Could the only strategy to rebound travel retail be to make a dramatic online shift? Or could the joys of returning to international travel bring an onslaught of eager shoppers?
Aside from a change in airport traffic, travellers’ shopping habits have also contributed to the change in sales and individual passenger spend has continuously declined since 2002 at a rate of 3.4 per cent.
For many of us, a trip to the airport meant an opportunity to impulsively stock up on products and fragrances that we did not necessarily need, but the lower prices and excitement of a trip abroad came with increased spending. Now, with the ease of online shopping and more conscious consumers, excessive buying has become less appealing.
Traveller demographics have also changed in recent years, bringing different shopping habits along with them. As more low-cost airlines such as EasyJet and Ryanair have entered the scene, air travel has become far more accessible, while luxury purchases are not, even duty-free.
Millennials now also account for the bulk of business trip spending, at roughly 46 per cent. Studies have shown that Millennials tend to be far more planned in their shopping behaviour, they are less impulsive and make more conscious choices.
These significant changes in travellers’ shopping habits and the wider travel scene of late has led to a number of luxury brands and travel retailers to rethink current operations to become more flexible to these needs.
The Heathrow Boutique app has been working towards making a more contactless shopping experience for travellers over the past year. A new feature lets travellers reserve a product ahead of time, enabling customers to pick it up quickly on their way to the gate.
Also capitalising on the opportunity to send travellers personalised offers and promotions via text and email when they get to the airport to entice more airport shopping. This allows brands to take advantage of the fact that the first thing most passengers do after security or when they get off the plane is check their phone.
With shopping experiences high on the list of priorities for any physical retailers, travel retail has begun to take notice of the need for personalised experiences and quality customer service.
The travel retailer Gebr Heinemann is planning to roll out a virtual “lipstick bar” in some of its stores, which features in-store tablets that use AI to see what lipstick shades might look like on skin. Once a customer has selected a colour for purchase, a light signal will indicate the exact shelf location of the product making the shopping experience seamless and enjoyable. Whilst beauty giant Clarins has begun pairing all of its products with QR codes that shoppers can use to learn more about the product right at their fingertips.
Whether you’re opting for a sunny getaway or a business trip is on the horizon, a trip to the airport can be met with an enjoyable shopping experience if you know exactly what to shop for. Here are a few products to look out for when jetting off to your next location.
This six piece kit has everything you need to create the ultimate bare beauty complexion. Ideal for sunny climes or effortless glam for evenings out, the kit features on-the-go sizes of the brand’s best selling complexion perfecting products complete with an application brush and makeup clutch. This is the perfect travel-ready purchase.
After many months of rain and grey clouds, we have never been so keen to hop on a plane to a warmer destination. As we are all well aware, suncare is key and for those who love the water, finding the perfect formula that won’t harm the environment can be a challenge. Biotherms first eco-designed sun care with no compromise on sensoriality, uses eco-tested SPF filters and a 95% biodegradable base formula for a lower impact on the water environment. So you can protect your skin and the ocean.
Who can resist a fragrance purchase especially when faced with the vast array of options on offer at duty free. Arancia di Capri is a relaxing, vibrant fragrance brought to life by the combination of orange, mandarin, and lemon essential oils, finished with a light touch of caramel and sensual notes of musk. This fragrance instantly transports you to an exotic destination and with £40 off of the high street price, your new signature fragrance is waiting for you.
When travelling comes with restrictions and liquid products limits, the perfect, refined skin care products become essential. This travel exclusive set is especially designed for dry skin which can become irritated by the harsh effects of travel. It combines one cleansing step and one hydrating step for the optimal on-the-go skincare routine.