What Really Makes the Sixth Continent of Luxury?

Jun 12, 2018

The ‘Sixth Continent’ is identified as, globetrotters’ preference to shop in airport duty free retail stores. According to Marion Hume, a British journalist and book writer, ‘Your boarding pass acts as a permission to shop.’ Is this why airport retail continues to accelerate further in the coming years?

Forget the mundane beauty, tobacco, stationery and confectionary duty-free stores of the past. With travel retail foreseen to surpass expected growth in the coming few years, luxury brands continue their growth strategy by expanding the business in international airports. These luxury brands understand airport retail as an international stage for global presence and a way to get into the spendings of existing and new customers, most importantly the ideal customers - affluent and savvy.

Travellers no longer shop just because they are ‘too free’ before flights. In fact, today, many highly influential travellers have no time to shop, except when they are waiting for their flights. Thus, luxury brands see the reason why investment in sophisticated flagship boutiques is important to catch the golden hour. Traditionally, brands count on their domestic presence to uplift the business in duty free. But today, we observed that tremendous success in airports can significantly lead to an amplified effect on traditional stores.

Designing the perfect shopping experience

Airport operators are switching up the layouts to create a more conducive shopping paradise, with a well thought ‘buying path’ after security clearance which one must pass through before arriving at the boarding gates.

Nonetheless, there is more to this unique retail business. Conventional travel size, exclusive travel sets, grab & go, tax free prices are the norm in airports. Consumers in the ‘sixth continent’ shop differently from landside. Imagine the hundreds of brands put in one location, how much time does each traveller possess to enter every store? For this reason, unique product offerings and personalized services are key.

Brands across all categories are creating lifestyle shopping experiences and putting out limited editions. More than being in the eyes of a captive international audience, travellers’ demographics can be easily harvested from boarding cards, down to the assortment choices of different nationalities. Indeed, only the ‘sixth continent’ is capable of this – Chinese nationals travelling back to Shanghai from France fancy baby pink blushes. You should also not be surprised to find a loyal customer travel out of country for the sole reason of a travel exclusive limited-edition handbag or purchasing the Hugo Boss’s travel leather belts only available in Changi Airport.

Iconic fashion house, Louis Vuitton, has banked on their rich travel heritage, modernity and vision to redefine the future of luxury airport retail in Changi International Airport with a spectacular duplex store in the new crystal garden. One can find a whole range of travel related products on the ground floor. Indeed, this creates the perfect environment for a traveller to spend. ‘First in the world’ launches are slowly trending, and these influence travellers to spend even more.

Brand conscious consumers are pursuing higher customer service offered with a personalized shopping experience. At London Heathrow Airport, travellers can book a complimentary tailor made personal shopping service with a stylist.

Brands across all categories need to catch the travellers’ golden hour after immigration checks. Beauty brands like Chanel, Dior, Guerlain, Yves Saint Laurent and Shiseido have created immersive retail experiences with virtual reality headset, smart digital mirrors, worldwide social media activations, interactive photo walls, discovery of the brand story and special access upon minimum purchase.

Emerging countries are key

Globally, the growth of duty free sales is primarily driven by the Asia Pacific region. 83% of travellers consider shopping an integral part of the travel experience. Today, when the Chinese travel, they are the largest luxury spenders due to the high import taxes in China. According to Travel Retail Partners, by 2025, Chinese travelers are expected to hit $450 billion in duty free stores. According to Global Blue, Chinese travelers top the list of affluent flyers splurging away when travelling, which it says is likely due to “the reaction by Chinese globe shoppers to their unstable economy and currency concerns.”

Millennials are the hot topic among brands today because they value the importance of seeing the world - young and ready to travel. Nielsen’s global study showed that more than 63% of millennials travelers made luxury purchases. Millennials also value brand and product exclusivities, trends and personalized services. In this case, price no longer becomes the cause of consideration.

Many airport duty-free shops around the globe keep track of flight schedules in order to make sure Mandarin speakers will be on hand when Chinese passengers arrive, and staff are trained to respect cultural differences in service, such as Chinese consumers preferring to have testers for perfumes. Visual merchandising is also changed throughout the day to suit certain nationalities’ preferences.

Top retail airports

The next time you are travelling through the top five retail-oriented airports, namely London, Dubai, Singapore, Hong Kong and Seoul, observe carefully and you will identify these are the few key factors of building a successful shopping destination, out of home.

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