Once again, America is the land of opportunity for travel retail. Swift travel recovery and a booming demand for retail mean that land of the free is one that all stakeholders in our industry are paying very close attention to – and if they are not then they should be.
This is a market which has recovered fast from a travel point of view thanks to its large domestic travel market. This made it one of the best case studies for how travelling shoppers would – and do – behave following the pandemic. Figures from IATA showed that domestic travel was up 97% year-on-year in January and a recent ForwardKeys study showed that the Americas is leading the way for recovery in international arrivals, with March 2022 seeing 61% of number recorded in March 2019. Furthermore, the Bureau of Transportation Statistics revealed that 674 million passengers boarded US airlines in 2021, up 82% on 2020.
All of this shows why the Americas should be a real focus for the travel retail sector as we head into full recovery in 2022. While the spending power of shoppers in China and Asia Pacific will always be a draw, those markets are recovering very slowly and it is going to be next year before their shoppers make a serious impact on the global market once more. The travel retail needs to widen its focus and the Americas are calling out for attention.
The Americas should be a real focus for the travel retail sector as we head into full recovery in 2022
It is not just the travel aspect of travel retail which is experiencing a boom in Americas either – retail is up too. According to Reuters, sales in the US have risen 17.6% since last year and with revenge spending already making its mark in the region, America is a key market for travel retail as we chart our course to recovery.
With that being said, it is worth asking what we can learn from this flourishing market as brands and retailers continue to get to grips with this ‘new normal’ in the wake of the pandemic.
During the Covid border closures and lockdowns, spend in the US moved inland according to PwC, and this reflects a wider commitment to spend from shoppers across the country, rather than just in the major financial areas. The key point is that in the wake of the pandemic, a whole new market of shoppers has been unlocked. These are people who have both a desire to travel and a willingness to buy. This is further reflected in the revival of the mall in the US, which comes as good news for airport retailers looking to shape their offer to meet the demands of modern consumers.
This revival of physical shopping is being supported Stateside by some major players. Pop icon Rihanna and her Fenty brand have opened their first physical outlet in Las Vegas, while Amazon is putting itself into the physical store market with its Amazon Style outlet.
This trend is spreading in travel retail in America as well. Spaces are being reopened and – importantly – reimagined. The Hudson stores using Amazon’s Just Walk Out technology, for example, are a great example of how tech can be used to develop and enhance this market.
They are also a step in the right direction for American travel retail which currently sits off the pace in many locations when compared to regions such as the Middle East or Asia Pacific. A more global offer, curated and cultivated to fit the desires of the modern traveller is needed across the region. Some airports are leading the way, such as LAX, San Francisco and Vancouver, but others must step up too. The deployment of Amazon’s Just Walk Out technology shows that big players from the wider retail world are already paying attention and they will deliver what shoppers want if existing players do not.
In fact, paying close attention is what we should all be doing. As the travel retail sector launches once more with an eye the future, we should all be paying attention to the markets which are recovering fast and showing us the way. In this respect, it seems that America is taking the lead once more.