By Marco Passoni
There are some common themes which appear regularly in my blogs: The importance of digital, the need to recognise the role price plays in travel retail, the value of experience etc. Some of these are planned repetitions, while others reflect how big a role that issue is playing in our sector today.
Looking back over recent posts, I can see that the Americas, and especially the USA, feature quite heavily. There is a key reason for this: While America has always been a core travel retail market, it’s importance to our sector has increased hugely in recent years. The USA was a catalyst for recovery in the wake of the pandemic with its boom in domestic travel, and as international borders opened its shoppers became key demographic for retailers and brands worldwide.
Indeed, I would go so far as to say we rebuilt the travel retail and luxury markets in the wake of the pandemic, and without Chinese shoppers, thanks in large part to the retail power of America and her shoppers.
Next week, the IAADFS’ Summit of the Americas will put a spotlight on this market as the show takes place in Palm Beach, Florida.
We rebuilt the travel retail and luxury markets in the wake of the pandemic, and without Chinese shoppers, thanks in large part to the retail power of America and her shoppers
There is no doubt that the US market is one which is full of opportunity at the moment. There are big tenders already in progress; the recently announced transforming and expansion of JFK T4 and the $3.9bn Terminal 6 project are just two examples, alongside the new terminal at Kansas City Airport, of a feeling of excitement and a fresh offer which is coming through the American market today. Alongside these structural developments, we are also seeing examples and potential for new and exciting models in the retail sector which will benefit both shoppers and the wider market.
But it is worth noting that groundbreaking retail concepts are not as common today in American airports as they are in Asia Pacific or the Middle East. The USA’s domestic retail sector features some incredible activations and engagement but these have yet to filter into the travel retail space. I believe there is a huge opportunity to fill this gap and it is something I am sure will dominate conversation at the Summit of the Americas.
American airports are not the whole story though. The country’s shoppers are possibly more important than they have ever been to the wider travel retail market. As early leaders in travel and spend, they have been a catalyst for recovery around the world.
American shoppers are possibly more important than they have ever been to the wider travel retail market. As early leaders in travel and spend, they have been a catalyst for recovery around the world
Currently, these shoppers apparently view the UK as a less attractive market due to the Government’s poor decisions on tax-free shopping, but luxury hubs across Europe are reaping the benefits. A recent report from the Wall Street Journal said US spend in Europe was up 40% in Black Friday week and the average transaction is currently $1,313, compared to $500 in 2019.
There can be no doubt that the US is a market on the up for both travel retail and luxury. Domestic stores are creating exciting retail offers which can and will impact their travel retail provision too. In the luxury sector, both LVMH and Kering saw spend move to Europe from the US last summer as travellers took advantage of the strong exchange rate and apparent desirability of the market.
The USA has always been a great market for travel retail and as much of the industry heads there over the next week, it seems that it is only getting better.