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Airports & Travel RetailersBlogOpinion

Introduction by: Peter Marshall

In airport terminals across the world, travellers are greeted with a myriad of retail opportunities. From luxury boutiques to duty-free havens, the offer of retail opportunities continues to grow everywhere.

Yet, despite the allure of tax-free shopping and exclusive offerings, there’s a prevailing sentiment among travellers that value remains elusive in airport retail, particularly across the alcohol and confectionery categories.

Perception often becomes reality, and in the case of Travel Retail, the perception of high prices looms large. However,  reality paints a very different picture. Behind the glossy facades and glitzy displays lie prices catering to all spend levels and accessible to all pockets.

So why then do travellers feel as if they’re flying blind when it comes to understanding the true value of their purchases? This is a very good analysis written by Garry Stasiulevicuis, Commercial Director  of Pi Retail.



 

Barriers to Purchase: Perception vs. Reality

A staggering 29% of non-buyers in airports cite expensive prices as the primary reason for not making a purchase. This sentiment transcends regions, with Europeans, Americans, and Asians alike expressing concerns over price tags. Particularly striking is the statistic from Middle Eastern shoppers, where almost half of non-buyers deem prices too as being too steep.

However, these figures only scratch the surface of a deeper issue: the failure to effectively communicate value. It’s not that affordable options don’t exist, it’s that travellers are not aware of them.

Unveiling the Hidden Gems: Affordable Luxury in Travel Retail

Contrary to popular belief, value in Travel Retail isn’t synonymous with exorbitant price tags. Instead, it’s about offering accessible yet quality products that cater to diverse budgets. Retailers are rising to this challenge (even if they are not successfully communicating it). As an example, a significant portion of the alcohol assortment is priced below $75 USD:

 

 

Asia: 62% of alcohol range is under $75 USD.

Europe: 76% of alcohol range is under $75 USD.

MENA: 70% of alcohol range is under $75 USD.

Americas: 68% of alcohol range is under $75 USD.

Moreover, the perception of travel retail as a playground exclusively for the affluent is debunked by the modest share of offerings exceeding $500 USD for alcohol:

Asia: 6.6% of range

Europe: 2.8% of range

MENA: 3.0% of range

Americas: 4.4% of range

 

The same can be said for the confectionery category too when considering the price brackets;

Asia: 79% of the range under $20 USD (40% of the range under $10 USD)

Europe: 76% of the range under $20 USD (39% of the range under $10 USD)

MENA: 76% of the range under $20 USD

Americas: 70% of the range under $20 USD

Empowering the Traveller: Meeting Demand for Value

As the world emerges from the shadows of a global pandemic, travellers’ priorities are evolving. Non-regular brands are gaining traction, driven primarily by a quest for quality and authenticity. However, alongside quality, value remains a crucial consideration.

The key to unlocking the potential of Travel Retail lies in bridging the gap between perception and reality. While premiumisation has its place, it’s essential not to lose sight of the majority of travellers seeking value-driven options. Value isn’t about extravagant splurges; it’s about elevating the travel experience through accessible upgrades, such as trading up from Johnnie Walker Red Label to Black Label. A point recently communicated by Andrew Cowan of Diageo in last week’s www.trunblocked.com.

Charting a Course for Change: Embracing Value Communication

To counteract the prevailing perception of high prices, retailers must double down on value communication efforts. From transparent pricing strategies to compelling promotions, there’s a wealth of opportunities to showcase the affordability and quality of offerings, something that needs to be done at a holistic and sub-category level.

As an industry, it’s time to shift the narrative from extravagance to accessibility, from exclusivity to inclusivity. By empowering travellers with knowledge and options, we can navigate a new era of Travel Retail—one where value once again reigns supreme, and every purchase is a journey worth embarking on.

 

 

Peter Marshall

Founder: trunblocked.com/Marshall Arts

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