Airports are providing luxury brands with access to consumers with extra time on their hands who want to buy unique and unusual items they can’t find near their residences. These hubs for travel retail, which are providing an audience of on-the-go travelers as U.S. shopping malls are on the decline, are also becoming locations where brands are innovating with products.
Edgar Huber, who heads the luxury division of multinational beauty company Coty Inc., said in The Wall Street Journal, “It’s not about discounting now; it’s really about experience.” The report noted that the firm’s pharmacy brands like Clairol and CoverGirl have grappled with declining sales. However, the company’s luxury unit is continually on the uptick — and travel retail is said to be partly responsible. In one case, the company rolled out a Gucci lipstick line at airports that encompassed a Goldie Red — it retails on the web for $38. And consumers at airports do make an attractive customer base as they have extra time that lets them stay in stores longer.
Luxury brands are looking to catch the attention of travelers who might be willing to explore new products. Bacardi Managing Director of Global Travel Retail Vinay Golikeri said, according to the outlet, “Over half of the people, when they travel and browse stores, they’re looking for something they can’t find back home.” Bacardi, for instance, launched an Aultmore Scotch whiskey three-part series at the United Kingdom’s Heathrow Airport and sold the bottles for $400 each. As it turned out, the brand discovered that many customers were actually purchasing all of the bottles for $1,200.
Consumers wait just over an hour — or 72 minutes — passing the time from security to the flight during a so-called “golden hour.” And travelers are working high-end shopping trips into their travels by purportedly gearing their layovers toward luxury shopping. At the same time, research firm Data Circle found that duty-free and other travel-retail channels saw global sales increase by roughly 9.3 percent to attain $76 billion last year. That figure marked a rise from $69 billion two years ago. Travel retail is said to encompass more than only airport shops: it also includes eCommerce orders that consumers pick up at the airport and in-flight purchases, among other categories.
Through product innovation at the airport, luxury brands are aiming to reach on-the-go travelers who have the time — and the desire — to try something new on the way to their destinations.
In Other Brick-and-Mortar News
Lululemon has quietly closed its men’s standalone stores in Toronto and New York City even as the company still intends to more than double its men’s business in the next five years. The retailer found customers respond to the company better “as a dual-gender brand,” spokeswoman Erin Hankinson said per reports. “We continually test and learn at Lululemon — which is what we did with the men’s stores.”
Toronto’s small-format men’s location — called “The Local” — opened in December 2016 and closed last year as revealed by Hankinson. The New York City Soho men’s store, which opened in 2014, was consolidated into a nearby larger format location. For now, the company is focused on expanding its more productive stores, which Hankinson said, “will continue to create space for category expansions and will help to grow our business, specifically in men’s.”
In other news, Domino’s Pizza and robotics company Nuro are working to use a custom unmanned vehicle to bring autonomous pizza delivery to Houston. The company said in an announcement that the fleet from Nuro will serve some customers in Houston who make online orders. Diners can track the vehicle through the app of the company and will get a unique PIN code to unlock a compartment and retrieve their pizzas
“We are always looking for new ways to innovate and evolve the delivery experience for our customers,” Domino’s Executive Vice President and Chief Information Officer Kevin Vasconi said in the announcement. “Nuro’s vehicles are specially designed to optimize the food delivery experience, which makes them a valuable partner in our autonomous vehicle journey.”
And Panera Bread has been piloting a menu for dinner at a Jacksonville, Florida restaurant in an effort that could bring delivery opportunities. The quick-service restaurant (QSR) is extending the test in July to nine Kentucky locations. Dinner is a popular time for delivery orders, and the chain taps into its own delivery drivers in place of teaming with another company.
Panera Chief Growth and Strategy Officer Dan Wegiel said, according to reports, “We definitely saw for delivery an opportunity with dinner, but it flagged as something we could unlock further for sure.” As many diners view Panera’s salads, soups and sandwiches as items that are too light for a dinner meal, the QSR company added options that would be available following 4:30 p.m. that are heartier like flatbread pizzas and bowls.
To keep tabs on the latest retail trends, check next week’s Retail Pulse.