Airport retailing ‘bright spot’ for brands

Airport retailing – already a US$38 billion industry – is set to grow by 27 per cent within four years according to research by GlobalData.

“Travel retail, particularly in airports, is currently a bright spot in the retail world,” says Maureen Hinton, group research director at Global Data Retail, upon the release of the report.

“Apart from the growing number of air travellers, increased security over recent years delivers a constantly changing captive audience for airside retailers, which claim 83 per cent of all spending in airports.  This audience has time to kill and, especially when on holiday, is in the mood to spend,” she said.

GlobalData predicts the total airport retailing spend will reach $49 billion by 2021, with Asia a key driver.

Asia-Pacific airports generated the most spending in 2016, taking $14.8 billion through their tills.

“Chinese travellers were a particular boon to this market, as they seized the opportunity to buy duty free luxury goods.”

Hinton says airport management is recognising the increasing dwell time of travellers – hand in hand with fast-rising numbers of people choosing to travel by air.

“Airports appreciate the extra revenue and are willing to invest in creating a more inviting space for travellers. For example, in Singapore’s Changi airport you can catch a movie, browse new art, play games, pamper yourself in a spa and entertain your kids – the airport equivalent of a modern shopping centre.”

At the same time, she says, retailers are grateful for the development of shopping facilities at airports, because it gives them the chance to get their brands in front of consumers who are forsaking high street shops for online and leisure experiences.

Europe ranks second on spending behind Asia-Pacific, reaching $10.7 billion in 2016. “One benefit of the UK’s Brexit decision was the subsequent increase in tourists to the country, who were attracted by the low value of the pound,” the report concludes.

“Even the US, which has traditionally offered a poor shopping experience at airports, is cashing in and developing new retail spaces and offers. However, it is unfortunate that this coincides with President Trump’s attempts to curb immigration, which is making regular travellers think twice about visiting the country.”

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