Travel terminals, airports in particular, have become a booming market for mid-market and luxury brands. Travel retail is now a distinct sector within the retail industry, reported to have the biggest growth opportunities among retail business worldwide. Airport-based shops enjoy a clientele, which is influenced by two factors high street and online retail are unable to take advantage from: a captive audience – consumers having time to spend in a limited space, and the perception that travelling is a break in routine where impulses are allowed. 

With the ultimate goal to gain insight into the mindset of the UK travel retail customer, we firstly ran a demographic steer to establish the part of our consumer community, which has bought products in one or more of the following categories at an airport within the last year:

More than 60% of consumers are recent travel retail customers. Out of the six most popular segments, Cosmetics & Fragrances have enjoyed most sales – a third of our consumer community has bought personal care items at airports within the last year. For this reason we decided to dig deeper and check which beauty products are most popular. We ran a multi-answer steer to personal care shoppers at airports, giving them a choice of six types of beauty products:

Fragrances greatly outperformed all other products, with 72% of Cosmetics & Fragrances airport shoppers having bought fragrances in the last year. Looking into demographic slices by region, we established that Northern Ireland, London, East Midlands, Eastern, North West, and Scotland scored higher than the average for fragrance purchases, with over 75%. This might indicate that airports such as Belfast International, Gatwick, Heathrow, East Midlands and Manchester are likely to perform better than the average in terms of fragrances sales. 

Location aside, it is important for brands to understand what motivates fragrance purchases at airports and tailor their offerings accordingly. In a single answer steer, addressed to the the same consumer subset, we listed seven options of most likely motives and obtained the following result:

Best value is the strongest motive for almost a third of airport-based Cosmetics & Fragrances shoppers. However, media sources have expressed concerns that in the UK some consumers might still consider all airport-based shopping to be duty-free, i.e. exempt from VAT, whereas currently the saving is only available to passengers flying outside the EU. Leaving the EU could mean the return of duty-free shopping for travel to any destination, which would be a great opportunity for brands and retailers to market to value conscious shoppers. 

The remaining two factors having exceeded 15% of single choices are promotions and search for entertainment while waiting for a flight. These two motives make marketing activities at airports by fragrance brands particularly important. A comment published last year by Essential Retail Magazine envisaged that travel retail would soon belong to brands that explore value in more creative ways through the lens of experience, by becoming a delightful part of a traveller’s journey.

One brand is leading the way. Beauty manufacturer Estée Lauder has been praised for creating consumer experiences in its quest to improve brand love, awareness and engagement. In line with this strategy, its niche fragrance brand Jo Malone has created a gifting campaign at London Heathrow, Manchester and Birmingham Airports. The brand’s ‘Scented Spectacular’ sites aim to create an immersive experience, in which visitors can twin their favourite fragrance with another, as well as personalise their purchases with charms and calligraphy services.

Whilst some customers will be looking for a specific item from a specific brand when they shop at airports, many will enter with a more general need in their spending, or make impulse purchases. In a preference steer we trialed five female fragrances with the aim to compare exclusive preferences with all preferences of female consumers having bought cosmetics and fragrances in travel retail in the last year. Exclusive preference results only take into account consumers’ consistent choices of their favourite product every time it has been shown, while all choices include the choices made by consumers who didn’t express a clear exclusive preference for any given option:

The exclusive preferences on the left highlight Jo Malone as a leader where it comes to conscious purchase decisions. This reveals the strong potential in niche fragrance retail at airports, where consumers are likely to be looking for exclusive products and are inclined to treat themselves with luxury items.

All preferences on the right, however, draw a different picture. We have three winners, without significant difference between them. These results are somewhat representative of impulse purchases, which could be influenced by a pleasant shopping experience.

There are several factors making airport shopping different from other forms of retail. While important, value could be outweighed by a couple of psychological factors. Travellers look for entertainment when they have time to spend before their flight and are more inclined to treat themselves with luxury products as part of their travelling experience. When it comes to fragrances, the best-selling products in UK’s airports, marketing campaigns and personalisation can address both factors.

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