Travel Retail Cruises Despite Headwinds


Travel Retail Cruises Despite Headwinds

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Travel Retail Cruises Despite Headwinds
Travel Retail Cruises Despite Headwinds

Cannes, France – Cautious optimism. Here's how travel retail executives summed up their thinking at the recent TFWA World Trade Show and Conference.

The event in Cannes, France, held October 2-6, was the second after a two-year hiatus due to the coronavirus pandemic. This year, the organizers of the exhibition called the course "New World".

No more WWD

Today, travel retail is truly a new world as the industry looks forward to returning to business after a business disruption shortly after the health crisis began in early 2020. Supply chain, airport disruptions and other issues.

Nevertheless, business is booming.

"After so many months of uncertainty, there is definitely good momentum in the industry," said Benjamin Fouchault, President and CEO of DFS. The consensus is that everything is back.

"There is optimism," he said. "We are certainly wary of the headwinds that we know exist around inflation or supply chain issues that still prevail."

All the big players in the beauty industry are back at the show this year, including big US companies that were absent in 2021. However, there is still a noticeable absence of visitors from Asia, particularly China, due to the ongoing COVID-19 pandemic. There are Limits.

The seaside city of Cannes and the sprawling Palais des Congrès were once again packed, but with less fanfare than in previous years. Dozens of giant billboards no longer surround the buildings and the Croisette footbridge. But Estee Lauder Cos. Barrière The Majestic is adorned with pink ribbon posters to celebrate the 30th anniversary of the Breast Cancer Campaign and its travel industry.

Israel Asa, Global Head of Retail at Estée Lauder Cos., said: “We are very optimistic about the future of the chain. We know it has always been, and will continue to be, resilient, and we see many incredible opportunities for growth. , There are many bright spots. ".

Stanislaus Archambault, Executive Vice President of International and Digital Sales at Interparfums SA, agrees that "the market is really strong".

"If we look at our numbers globally, we will see that we are much higher than ever before," added Frederick Garcia Pelayo, the company's director and executive vice president.

This TFWA session attracted 5,983 participants, a 77% increase over the previous year. For comparison, in 2019, the exhibition recorded 7,215 people who walked through its doors.

There were 387 exhibitors in 2022 compared to 262 stands, 272 exhibitors in 2021 and 504 exhibitors in 2019.

How quickly people return to traveling extensively and buying products from travel suppliers will have a major impact on the business of companies that sell luxury perfumes and cosmetics, which remain the number one product category in the world. Before the crisis, it was able to generate up to a quarter of the cosmetics group's total sales.

In 2021, the global travel retail market is expected to reach $56 billion, up 25% from 2020 and 65% from 2019. Of these, Perfumery & Cosmetics sales reached $32.3 billion, up 19% for the year. – a year-on-year recovery and an 86% recovery from 2019, according to Generation Research, which tracks duty-free and retail markets.

Passenger traffic is recovering in many parts of the world, particularly Europe, the Middle East and the Americas, reaching all-time highs in some regions.

Production data shows that in 2021, the entire Asia-Pacific region returned to pre-pandemic sales levels, while Africa and the Middle East saw a 50% recovery and the Americas and Europe saw a 45% recovery.

Speaking on the show's first conference call, TFWA Chairman Eric Jules Mortensen cited ACI's forecast that global passenger traffic is expected to return to more than three-quarters of 2019 levels by the end of 2019. Mechanically, this should lead to an increase in tourism retail sales.

Some cosmetics companies, like Shiseido, have already quickly surpassed their 2019 sales levels. Travel and travel retail sales for the first half of 2022 increased by 15% compared to the corresponding period in 2021 and by 18% compared to the first half 2021 report. 2019 .

"We believe that for Heinemann [this year] we can be back at or near 2019 levels, and beauty should be included in at least one or more performance lines," said Britta Hoffmann, director of perfume purchasing and cosmetics at Gebr. Heinemann, which operates travel retail stores. “We are very optimistic that at least 80% of 2019 is possible – maybe even more. It depends on whether we get the products.”

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The changes in travel retail come as no surprise.

"After two years threatening the existence of the free market and travel, it was inevitable that the pandemic would lead to change," said Jules Mortensen. “Traveller expectations have changed rapidly compared to the pre-COVID-19 era.

"We're seeing a new desire among travelers to engage with brands, particularly those that share our values ​​and focus on sustainability, and a growing interest in immersive experiences," he continued.

Jules Mortensen notes that the composition of travelers by nationality has changed: there are still practically no Chinese travelers and, in general, fewer Asians are taking trips. At the same time, the number of Indians going abroad and Americans going to Europe has increased.

"The real variable is when the Chinese will come back from Greater China," said Bulgari CEO Jean-Christophe Baben, adding that it's not expected until late 2023 or early 2024.

Meanwhile, mobile shoppers are getting younger as the proportion of Xers, Zers and Millennials shopping at duty-free and travel stores has increased from 19% before the pandemic to around 30% in 2021 and 2022. Data from the M1nd Group – specializing in travel research.

“That's why it's important for us to understand our customers – who they are, what differs by region, what they want and how they shop,” said Guillaume Such, Coty's senior vice president of travel retail, global and general manager China. GmbH

For example, Coty is working with Alipay in Asia to bring such ideas together.

M1nd Group has observed other behavioral changes over the past five years, including a shift from gifts to purchases for self-consumption, a greater preference for planned purchases over impulse purchases, and a new willingness to engage with store staff.

"What you're seeing is a mix of categories coming back a little different because the Chinese don't travel. So it's a much richer blend of fragrances than before, with plenty of skin care. And the makeup is recovering well," said Peter Juptner, International Director of Estée Lauder Cos. After that, of course, there will be more options for hair care.”

The constantly changing passenger aisles provide information about what is on the shelves of the Lagardère Travel Retail Stores. While its European offices now benefit from a large flow of passengers from the Schengen countries, the operator has adjusted its cosmetics line accordingly, giving more space to European skincare brands such as Caudalie, Nuxe and L'Occitane.

"We will continue until the Asian [passengers] return," said Carla Truddick Marishita, makeup and skincare manager at Lagardère.

Another notable trend is the growing consumer appetite for high quality and affordable cosmetics.

On the luxury side, La Prairie's business is booming.

"In 2021, we increased our market share," said Sabine Fagan, director of global retail business development at La Prairie Group. She added that this year we are "almost at the level of 2019 and even above [than] retail in Asia."

La Prairie now owns 2.5% of the skin care market, though its sales are down 10%. It is one of the top 10 global skin care brands with 250 retail stores.

"What we've done is become more selective about where we are and more focused on our valued customers," said Noelle Juris, current vice president of retail at La Prairie Group.

This includes offering quality 10- to 90-minute skin care services, such as: B. Facial treatments, in a variety of special areas, mainly in downtown duty-free shops. The list of processes there is dedicated to the channel.

At the other end of the beauty spectrum, L'Oréal Paris is in high demand.

The brand's parent company, L'Oréal, conducted the study in July with 700 cosmetics shoppers at Paris and Dubai airports. They were asked which brand brought them into the perfumes and cosmetics section of a retail store. L'Oréal Paris takes first place with 13% of respondents.

"Obviously we're recruiting new travelers at P&C. We're also increasing the shopping basket because 68% of them have brought another [prestige] product to L'Oréal Paris," said Carina Behar Lequiler, CEO. Consumer goods for travel. Worldwide distribution by L'Oréal. "This also makes us an additional offer for luxury brands."

Consumers say that L'Oréal Paris products attract them with their convenience, exclusive offers and impulse purchases, especially cosmetics. To increase brand awareness, L'Oréal Paris has launched a new gondola.

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According to Stephanie Garnier, Category Manager, Animation and Promotion for Global Duty Free Perfumes and Cosmetics at Lagardère, consumers are looking for “value for money at affordable prices”.

Dufry, who regularly surveys travelers, notes travelers' growing interest in luxury and sustainability.

"It's very quick," said Antonin Caro, Global Beauty Director at The Dufry Group. "That's why it's become a priority.

"We are deeply committed to promoting sustainability and luxury in the travel and airport sectors," he continued, adding that Dufrey has partnered with beauty brands such as Augustinus Bader, Drunk Elephant and This Works to that end.

Dufry has developed a new in-store shopping concept called Mind, Body and Spirit, tailored to each location and taking into account customers' specific needs and desires. It includes various product categories in which beauty plays an important role. The first location was tested at Amman Airport in Jordan, and a second recently opened in Sao Paulo.

"We're gradually looking at multiple locations around the world," said Caro. "The first results are very positive."

At TFWA, Clarins Group highlighted its natural heritage based on social responsibility by designing a new boutique featuring flower pots and wooden wall panels. He will be transferred to Heathrow and Charles de Gaulle by the end of this year and to Istanbul in the near future. On Hainan, the Chinese island that has become Mecca's duty-free zone, five stores are already sporting the new design.

New competition

While in the past the biggest competition between wearers and brands that sold retail beauty products was each other, today it's companies like Netflix and Spotify. So the race is on to lure travelers off their screens and into the stores to shop.

"Entertainment is paramount," said Marcus Stauss, vice president of global retail and travel marketing at Coty. “How can we increase traffic in the store? Either through knowledge so [travellers] learn about the products, or through gamification.”

Digital acceleration is the key to everything.

"Can we transform travel retail into a more modern distribution channel and beauty technology?" asked Vincent Poenet, president of travel retailer L'Oréal.

The answer is a resounding yes. As an example, he cited YSL Beauté's Scent Station technology, which uses neurobiology to provide specific scent guidance by matching a person's emotional responses to a scent. It will be unveiled in Hainan later this month.

Sharing data is also essential for business growth.

"More than ever, passenger and shopper data that drives customer interactions is the new currency of our industry," said Jules-Mortensen, adding that the reluctance to share such information between industry groups persists in tourism. Detail. "It is very important to make informed decisions, especially in these troubled times."

L'Oréal shares data with all of its partners in Hainan.

"In a way, this is the cut that we've been talking about for years," Poynai said. "It's used to create lifetime value and customer relationships."

"The more data we have, the more personalized the service becomes," Fagan said. "It's a win."

“Retail and tourism is about learning from consumers and understanding their wants and preferences,” Asa continued. "It's about inserting that experience into the consumer journey so we can add value and create the right memories."

Travel retail also aims to improve the shopping experience.

"You're going to see more experiential retail in travel retail," Guptner said, explaining that that means more services and events.

DFS opens three branches at the end of October. The T Galleria Beauty Mall in Macau doubled in size to 2,000 square feet. It will feature eight exclusive brands including Fekkai and Davines, marking the operator's first foray into haircare.

"This store is going to be a mobile-only store, so it's really about service, customer service, personal interaction, healing, and introducing new categories," Fuchut said.

With its latest annual cosmetics campaign, DFS enters the metaverse for the first time and offers brands the opportunity to establish themselves in this digital world. Stone and Mortar Activation is also being revived with statues.

All of this is part of an omnichannel approach that is currently being practiced in Asia and is rapidly gaining traction in the western world. A comprehensive strategy involves touchpoints between retailers and brands with consumers before, during and after travel.

To help consumers prepare for travel ahead of time, Nars by Shiseido has released its first 3D virtual animation, allowing people to experience the brand's exclusive products and best-selling travel experiences through an avatar before boarding vacation travel. Launched in April, it aims to drive brand awareness and excitement throughout the consumer journey.

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"It will be very interesting for us to have different strategies for different types of travel," said Seif Zhao, vice president of strategic marketing at Shiseido Travel Retail.

To further blur the lines between physical and digital retail, Molton Brown has launched TFWA, an innovative technology powered by artificial intelligence.

"You never know how many people come on shopping trips — you never know how many people come," said Mark Johnson, global president of Molton Brown, adding that the store could experience understaffing and difficulties. Translation of beauty consultants into languages. "That's why we developed an AI that can interact."

Passengers can ask the virtual assistant their questions on the screen in their native language. Molton Brown UK Customer Service will then reply in English and their replies will be automatically translated into the language in which the question was asked.

Just as geographic recovery is occurring at different speeds in travel retail, so is the recovery in beauty product categories.

According to Generation, skin care was the only segment in 2021 whose sales exceeded 2019 sales in the channel by 110%. This is largely due to the Asian consumer who continues to shop locally, as well as other demographics where self-sufficiency is becoming increasingly important.

Aware of the strength of premium skin care brands today, particularly in Asia, the Clarins Group has just entered the sector with the Clarins Precious brand. The price is around $300 for 50ml. There are no jars of cream.

“This is a new chapter in the Clarins story,” said Alexandre Clarins, Clarins Group Travel Retail Manager.

Ассортимент из трех продуктов был представлен в сентябре на внутреннем рынке Китая и будет запущен в остальной мир в марте 2023 года, прежде чем появится на розничных прилавках в сентябре 2023 года.

Руководители также отмечают высокий спрос на бренды косметической дерматологии. In Lagardere, например, Гарнье заметил интерес к La Roche-Posay, Vichy and Filorga.

На tfwa компания shiseido среди Своих брендов По уоду кожей Представила новых уастников Выставки, В тисле Drunken Elephant.

Уход за . По словам Анн-Лори Лесерф, генерального менеджера подразделения L'Oréal Travel Retail профессиональных товаров и розничной торговли для путешествий, Kérastase помогает привлечь новых клиентов на косметический рынок канала.

Эсте Лаудер Кос. Aveda занимается розничной продажей туристических услуг, особенно в Азии. У Wella был свой стенд на TFWA.

Продажи парфюмерии также выросли. По словам Папина из bvlgari, больим сюрпризом, Возникиим В Период Пандемии, стало то, что аиаты, не являющ

"Это открывает новые возможности для развития ароматов бренда в Азии", — сказал он.

На выставке Bvlgari предложила посетителям мультисенсорный опыт аромата The Tygar Gem. В специальной комнате человек носил гарнитуру, которая в режиме реального времени собирала мозговые волны и обратную связь с ее сердцебиением, чтобы испытать запах, обоняние и визуально, с помощью связанных изображений. It is considered that it is not possible for the NFT to be unique.

"В ближайшие годы мы хотим вырастить непропорционально дорогие [парфюмерии]", — скаказаПал.

Вучот подчеркнул силу нишевых ароматов премиум-класса на выставке DFS.

"Мы намного превысили наши цели для этой категории, и мы собраемся расширить ее", — расширить ее

"Мы Видим, что Потребители, как толькоs Прибывают В наши эропорты, готовы тратить", – Продолжил хофф „Они хотят иметь что-то особенное … что будет длиться долго.

Напротив, некоторые потребители ищут хорошую цену and хорошее соотношение цены и качесс.с

"My selection is for the category of aromatizers and brands that are sold", — продолжила она.

Через собственный центр технического зрения Heinemann, Gharage, оператор разработал специальную линию из четырех ароматов с целью заполнить пустое пространство в пространстве функциональных ароматов.

"Идея состоит в том, чтобы привести вас к личному балансу", — сказал ХофЄman.

Heinemann для секторакы.

В рамках Своей Парфюфюерной стратеги coty запустила дорогие коллекии, такие как 'Alchemist's Garden of gucci and boss collection, для ровли.

"Аромат — это новая помада", — заявил Суш.

В этом году энтузиазм руководителей по поводу возвращения в TFWA был очевиден.

"Price should be in the can, the brand and the names and the number of people who are rasskazat the tom.

قال تشاو: "علينا أن نحافظ على هذه الروح ، وأن نعيد ابتكار أنفسنا دائمًا". "لأن هذا هو ما يتوقعه المستهلكون من العلامات التجارية."

الإطلاق: التنفيذيون في معرض TFWA التجاري 2022

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