HMY > Retail Travel: A Key Channel For Luxury Brands

Retail Travel: A Key Channel For Luxury Brands

The increase in airport traffic in recent years has allowed travel retail to grow considerably.  There are plenty of brands that have identified the opportunities offered by commercial spaces at airports to increase their scope and reach a broader market, among them luxury brands stand out.

You’d assume that if one of the reasons for increasing passenger traffic has been the proliferation of low cost companies, then luxury companies wouldn’t be the ones with the greatest demand by this type of consumer.  But the reality tells a different story.

The large number of passengers that have to go through airports everyday, together with global economic growth over the last few years, has favored profits for all brands that use travel retail as one of their sales channels.

Why Are Airports So Attractive For Luxury Companies?

Commercial spaces at airports have some characteristics that are actually very interesting for luxury retail companies, especially after the changes in recent years favoring their exposure to customers.

For starters, they are open and wide spaces, which bring in a larger number of people in comparison to traditional shopping malls or stores located on streets in urban centers.

Not only do regular luxury brand customers access these points of sale at airports, but also other types of customers as well, people who traditionally don’t frequent these stores, but at airports they see them as accessible to walk through and get to know. This point favors profits, as it’s demonstrated that the more time consumers spend at stores, the more likely they are to make a purchase, and new customers always show more interest and curiosity to discover new products.  Shopping for luxury products is also justified by discounts offered on some international routes, and especially by the reality of being in a place that has a particular experience and makes people prone to spending.

The Importance Of The Golden Hour At Airports

Having arrived at this point, you have to understand that there is something about travel retail that other sales channels just don’t have: the so called golden hour.  This lapse of time, which really doesn’t have to be just one hour, but often it’s actually much longer, defines the period of time when passengers go through airport security and when they board the plane to their destination. 

The majority of passengers dedicate this time to visiting shops at airport terminals, especially people who are enjoying trips for leisure and vacations.  It’s been shown that these people are more likely to shop at these stores.

Also, to respond to a greater affluence of passengers, airports have adapted and facilitated shopping spaces for brands that are much bigger and modern, in order to attract and retain a larger number of customers.

The shopping spaces at airports with the greatest traffic in the world are proof of this.  Some of them, like Heathrow, John Fitzgerald Kennedy or Changi, don’t envy anything about the most famous shopping streets in the world, like Bond Street, in London, o New York’s Fifth Avenue. Airports have stores with the most exclusive brands in the fashion or beauty industries, and at the same time, they are much more accessible to any type of consumer, whether they are regular or sporadic customers.

The figures also support this theory. The number of passengers that transit annually between airports is over 1 billion people, about 15% of the world’s population, with economic figures that exceed 60 billion dollars for brands, only from travel retail.

The forecasts, as we’ve said before, continue to be very positive with respect to this sales channel, so brands will keep innovating and investing to reach a bigger market and therefore, a constant improvement in their profits.

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