Luxury Travel Retail Takes Flight in Asia

25 Mar 2014|Added Value

At the Luxury Travel Retail conference organised in November 2013 by the Luxury Business Association, we sat down with fellow speaker Jérôme Goldberg, founder of JMG-Research. He shared with us his views on the opportunities for luxury and premium brands to reach their consumers in this inspiring, upscale environment, as well as discussing which markets were the most promising.

Added Value: Jérôme, you were a speaker at the conference organised by the International Luxury Association. Could you introduce yourself and tell us more about your expertise?

Jérôme Goldberg: I have been involved for almost 20 years in Travel Retail, and I am the founder of JMG-Research, a consulting and research company working mostly with brands, airports and operators. We focus on ad-hoc missions regarding specific passenger profile analysis, quantitative and/or qualitative on the one hand; on the other, we offer syndicated Global Shopper Surveys, our ‘PAX GLOSS’, to look in detail at consumer behaviours in Duty Free environments, such as airports or during international flights.
We also help our clients with a curating program on Travel Retail as well providing relevant information outside of the Duty Free field, on, for example, tourism trends or new technologies. We are always happy to be invited to speak during industry events and at conferences.

Added Value: What represents today’s travel retail market? Why is it important for brands?

Jérôme Goldberg: Travel Retail is important at two different levels for brands today. First of all, it is important in terms of sales, as Travel Retail can easily represent 15% to 20% of the worldwide turnover for a fragrance or spirit brand. But ever more important is the ability of Travel Retail to act as a showcase as part of brand’s international development. For luxury and premium brands, it is a unique opportunity to reach existing and prospective customers in an upscale retail environment.

Added Value: Broadly speaking, who are these travel retail consumers, what are their expectations, and what do they buy?

Jérôme Goldberg: It is quite difficult to draw a generic profile. We prefer to start from a matrix which involves:
– the 3 key reasons to travel: Business trip; Leisure trip for holidays; Leisure trip to visit friends & family,
– the 3 key reasons to buy: for yourself; for gifting; following someone’s request.
The nationality of the passenger is also important, as this is linked with the development of the local market, both retail-wise and tax-wise, factors which have a knock-on effect on interest in Duty-free products. Add other criteria like gender, age, frequency of travelling, travel leg (outbound vs. inbound), etc. and you end up with the complexity of passenger expectations that both brands and the shop operators have to deal with everyday!

Added Value: Which are the markets/airports with the most opportunities for brands?

Jérôme Goldberg: Asia is the Holy Grail of Travel Retail these days. When talking about Asia, you have in fact to take into consideration passengers both departing from and returning to Asian airports (from Beijing or Shanghai to Singapore or Bangkok). It is also important to look at destination airports, which welcome more Asians everyday (Paris CDG or London Heathrow), as well as transit airports backed-up by the development of airlines (like Istanbul with Turkish Airlines or Dubai with Emirates).
Asia also benefits from downtown shops (like Korean Department Stores or DFS Galleria’s) and “Domestic Travel Retail” in China, where brands can enjoy luxurious environment to engage the visitors.

Added Value: China seems to stand out in the Asian market. What are the opportunities there, and what are the expectations and demands of Chinese consumers?

Jérôme Goldberg:
– Service: Chinese individual travellers are more and more experienced, and expect to be treated like a premium international passenger, with a VIP approach – not as just an open wallet.
– Experience: they are open to learning more about the brand, its history, how the products are developed and manufactured.
– Genuine products: unlike on the Chinese local market, Travel Retail is considered as a ‘clean’ channel, free from fake products.
– Fit for Gift: they need to be reassured when they are buying for gifting that their choice is the correct one, and suitable for the status of the receiver.
– Netizens: the Chinese are massive internet users, and it is crucial for brands to be visible online, as it is there that many future travellers will look for information prior to their trip to help them decide what they will buy, when and where during their journey.

Added Value: What is the most inspiring duty free area you have seen?

Jérôme Goldberg: Please allow me to give not one but four of them:
– Changi Airport in Singapore, for its ‘smooth’ journey. Everything is so simple there for the passenger.
– Hong Kong Airport, with its new shops now operated by DFS. In a few months, DFS has managed to upgrade these shops and offer a totally new experience.
– Dubai Airport. It’s simply fascinating to witness the evolution of this location. I was there 4 times last year, and I could see changes every time.
– Paris CDG Terminal 2. A lot was expected, and the revamping is impressive, delivering a real ‘Sense of Parisian Place’.

Added Value: What are your next projects?

Jérôme Goldberg: We are about to deliver our latest PAX GLOSS Global Shopper Survey. The next step is to dig deeper with our clients on the 15 covered nationalities, on the category-specific behaviours or on key airports specificities.
Then in our pipeline we have another survey on the Nordic countries, where Ferries represent a significant part of the Duty Free sales, plus 2 new projects that will be presented during the second semester, including one focusing on Brazilians.
We are also closely working with our clients on ad-hoc missions, around this idea of the ‘Global Shopper’ based on his nationality, consuming both in his local market and abroad when travelling. I would love to see a structural change among the brands, with ‘Nationality Managers’ instead of ‘Country Managers’. I’m convinced it is the right way to meet our consumers…

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