Cautious optimism expressed in Cannes

Last year Tax Free World Association (TFWA) president Erik Juul-Mortensen closed the TFWA World Exhibition & Conference with a comment on how buoyant the mood had been. And at this year’s closing press conference, he said that despite the challenges the industry had faced, the atmosphere was still upbeat.

Eventually, the event recorded a slight decrease in visitor numbers: 6,443 persons visited the show, down 2% from 6,558 last year. “A healthy figure under the circumstances,” said TFWA.

However, according to TFWA, the number of visitors from the key categories of duty free operators, travel retail operators, landlords and agents was up from 4,625 in 2016 compared with 4,584 in 2015, with 1,811 companies represented compared with 1,788 last year.

There are reasons for cautious optimism for the travel retail industry,” said TFWA president Erik Juul-Mortensen who likened himself to former British prime minister Harold Wilson, who stated that he as an optimist, but always carried an umbrella.

One key reason for optimism are growth forecasts regarding air traffic. By 2025, there will be more than nine billion air passengers, a 70% increase compared with 2015.

New consumption behaviours

During the TFWA World Exhibition & Conference, several speakers called for a new approach of the business that would take into account the change in consumption habits.

According to Garry Stasiulevicuis, managing director of Counter Intelligence Retail, attitudes to luxury are changing. ‘Luxury’ is no longer about possession, but all about experience. The travelling population has changed, and there is a much younger travelling consumer coming through airports who wants different things and different experiences.

CEO of Dufry, Julián Díaz González highlighted how a more experience driven, personalised offer was required to attract the all-important Millennial traveller.

Presenting highlights of TFWA’s recent study on the impact and influence of mobile technology and e-commerce on duty free & travel retail, Peter Mohn, founder and CEO of m1nd-set, highlighted that nine out of ten people use the internet at an airport. But what is interesting is that 31% of people said they were looking for information on brands and products to compare prices or to find out more by reading customer reviews. While in Europe 40% of passengers do this, in China well over half (56%) consult the internet when shopping at the airport.

Fall of inflight sales

Similarly, a running theme at the inflight workshop at this year’s TFWA World Exhibition & Conference was the necessity to innovate. Suffering a double digit decline, the value of the sector fell to US$2.64 billion in 2017, which is less than in 2007, nearly a decade ago.

Airlines can’t offer the same ranges as airport and they need to innovate constantly. Internet as a huge potential in this sector and can be a way to make flying and buying a real shopping experience.