The sixth continent – is airport retail the future for luxury brands?

15th January 2015

According to recent figures, more and more luxury brands are turning to airport retail for success – with fragrances and cosmetics heading up the charge – this sector is now regarded in some circles as the ‘sixth continent’ as many shoppers wait until they are going to travel before they pick up their favourite perfume or cologne. At present the travel retail market caters to 2.4 billion international travellers, with airport sales estimated to become a $100 billion market within the next ten years. The beauty sector, comprising fragrances and cosmetics, comprises 30% of total global travel retail sales.

Photo by Harry Cunningham on Unsplash

Photo by Harry Cunningham on Unsplash

Evolution Of The Travel Retail Sector

As discussed before on this blog, the entire travel retail sector has seen a sea-change in recent years – both in terms of retail design and burgeoning sales.

Airports are no longer transit venues focused around getting from a-to-b – they have become luxury shopping hubs, featuring rows of customer-focused concept stores, expansive product choices and unique offers.

Future Growth Potential

According to the UN World Tourism Organization, (UN WTO) more and more people are travelling overseas. In 2013 1.087 billion people travelled abroad and according to the UN WTO, this phenomenon shows no signs of slowing down, with an estimated annual growth rate of 4%.
The cumulative spending of these travellers amounted to $1159 billion, with the biggest spenders originating from China where international tourism has increased almost tenfold in the last fifteen years.

A Mainland Chinese Luxury Shopper survey conducted by Nielsen, found that 90% of Chinese travellers plan on buying luxury goods at travel hubs, just before they travel – and that for 97% of them shopping was a key factor in planning their journey. The most popular purchases were accessories (71%), and high-end cosmetics and skincare (70%).

The sixth continent

So this growth in international travel, teamed with a willingness to spend on duty-free luxury goods whilst travelling, has seen many beauty brands focusing their efforts on the travel retail sector.

In November 2013, L’Oreal created a division dedicated to travel retail, describing the channel as the ‘sixth continent.’ Recently L’oreal launched some of their most successful brands, including Vichy and Kérastase in some prestigious travel retail locations in Asia and the USA – where they have experienced a 6.5% year-on-year growth.

If you’re thinking of taking your brand to the ‘sixth continent’ then get in touch – Barber Design are one of the UK’s leading travel retail designers with a proven track record in branding and retail design for travel hubs.