The decline of the mall is happening, yet people still love to shop in airports.
Malls are struggling; the likes of Amazon and Wal-Mart have seen to that.
So retailers are focusing on winning customers at the one place where people reliably shop at brick-and-mortar stores: airports.
Big brands like Moncler, Jack Daniel’s, Colgate, and Estée Lauder are expanding their presence in airports around the world in a bid to lure travelers to buy impulsively while they wait for their flights.
More people than ever are flying commercially, with several trends behind the boom. The rise of budget airlines has opened up airline travel to new passengers. More than four billion travelers flew in 2017, up from under two billion in 2002, according to the Boston Consulting Group.
Global travel revenue, which includes duty-free sales at airport stores, has tripled over the past 15 years to $69 billion in 2017.
The air travel boom has led companies to identify an opportunity to reach Millennials traditionally drawn to making online purchases. Travelers have an average of 56 minutes of free time before their flights and typically spend 25 minutes shopping in duty-free stores, NPD Group estimates.
Luxury brands, alcohol makers, and cosmetics manufacturers are revamping their strategies to draw travelers during that window.
According to an interview with Montgomery Wilson, head of global travel retail for Brown-Forman (BFA), the parent company of Jack Daniel’s whiskey and Woodford Reserve, most travelers “are on holidays and they are open to discover and explore new things.”
Brown-Forman gets 4% of its annual sales from its “travel retail” unit, and it expects the unit to grow. The company’s sales in the division increased by 6% last year and 8% the year prior.
The company has been adding new whiskey lines to airports, including its Jack Daniel’s “Bottled-in-Bond” line which is only sold at airports and other international travel locations.
Beauty and skin care brands are zeroing in on airports as well.
“Travel retail is, to me, the most exciting channel,” Estée Lauder CEO Fabrizio Freda said in May. The company says that 59% of prestige beauty buyers’ first purchase comes at airports.