3 Insights on the Future of Travel Retail from the Trinity Forum 2018

The traditional travel retail industry, which encompasses airport stores and downtown duty-free shopping locations, is set to bring fresh opportunities to the global luxury industry in the near future.

According to statistics presented at the Trinity Forum 2018, the most influential travel retail conference hosted by The Moodie Davitt Report, China’s outbound travelers will account for 40 percent of the global travel market through 2021. The highly-mobile Chinese population is well known for their huge shopping demand for luxury and beauty goods when traveling abroad. For luxury brands, mastering the right way to cash in on this dynamic segment is set to become one of the most important things to do in order to score revenue growth.

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At the Trinity Forum 2018, held at the Jing An Shangri-La hotel in Shanghai from October 31 to November 1, a group of industry experts shared their insights on the future of travel retail sector. Here are the three statements that are most relevant to luxury brands:

Airport e-commerce is significantly under-developed but, in a huge industry shift and expansion, may not be for long

While the disruptive impact of the fast-evolving e-commerce sector in China and around the world has been strongly felt by the travel retail industry in recent years, the whole industry is still too conservative to fully embrace the trend to take advantage of what e-commerce can offer to serve digitally-savvy consumers, a number of speakers from Aireen Omar, Deputy Group CEO of AirAsia to Jayne Wear, Omnichannel Manager at Auckland Airport argued.

However, officials said building up a complete airport e-commerce ecosystem requires concrete efforts from the various stakeholder. The recent emergence of some technology firms that have a specialty in developing airport e-commerce infrastructure is much needed and welcome. In addition, a thorough understanding of consumers’ purchasing behaviors at airports is also significant. At the last session of the conference, Angela Wang, Managing Director and Partner of Boston Consulting Group China, highlighted a unique habit from Chinese luxury consumers, which is “research online, purchase offline.” Martin Moodie, the founder of The Moodie Davitt Report, noted that understanding that behavior is crucial in enriching airport’s e-commerce development.

Future luxury airport stores are the curators of brand identity, not the mass sellers of products

Traditionally, brands like to showcase mass products to shoppers to increase the chance for them to purchase items. However, the rise of e-commerce and digital technology lessens the shopping function of stores. Stores are shifting to be a location for customers to understand brands’ history, story, and concept, on the one hand, and become a place for customers to pick up orders that they place early online.

In a session exploring the future of the travel retail journey, Hiroshi Onishi, Executive Vice President & Chief Operations Director of Japan Airport Terminal Company, said airport stores need to take a curator’s role in organizing and presenting their products to consumers.

The beauty category is staying ahead by mastering the “experiential marketing” game

Among all categories, presenter Kenji Calméjane, Shiseido Travel Retail Asia Pacific General Manager, praised developments achieved by the beauty sector (where he was from) in delivering a high-quality and compelling shopping experience to today’s consumers. His statement was backed up by solid examples of airport experiential activations set up by beauty, cosmetics and fragrance brands in recent months.

As a matter of fact, players like Shiseido, La Prairie, and Yves Saint Laurent Beaute have pioneered in incorporating digital activations and latest technologies at their airport stores. Their success in providing impressive shopping for consumers and driving up sales offers lessons to many luxury players.

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Shopping & Duty-Free