In 2023, the global travel retail industry faces a significant $9 billion value gap, despite a strong recovery in passenger numbers, according to a recent report.
The report, titled Revolutionising Travel Retail by CXG, a customer experience consultancy, identifies strategic actions for stakeholders to bridge this gap and secure the industry’s future.
Data from ACI World in the report predicts global air traffic will hit 9.9 billion passengers by 2025, exceeding pre-pandemic figures, and nearly doubling to 19.5 billion by 2042. However, the average spending per traveler has decreased by 15%, from $19 in 2019 to $16 in 2023, reducing the total market from $86 billion to $72 billion.
CXG blames this decline on underwhelming customer experience standards in travel retail compared to domestic retail. While domestic stores offer excellent experiences 50% of the time, travel retail achieves this only 28% of the time, missing a chance to engage a captive audience.
The report highlights top examples of airports transforming retail into immersive, high-value experiences. London’s Heathrow Terminal 5 features personal shopping and luxury services, while Louis Vuitton’s Le Café at Terminal 2 combines fashion and gourmet dining. Singapore’s Changi Airport excels with AI-driven retail, robotic baristas, and attractions like the HSBC Rain Vortex and Shiseido Forest Valley. Doha’s Hamad International Airport and Seoul’s Incheon Airport incorporate wellness centers and cultural zones, increasing spending by up to 35% among engaged travelers.
CXG suggests a “Trilogy Approach” that unites airport authorities, travel retail operators, and brands to enhance customer experience, streamline operations, and preserve brand integrity. The consultancy stresses data-driven strategies, employee training, and stakeholder coordination as vital for growth.
With passenger numbers set to rise, the report calls for industry leaders to reconceptualize travel retail as an experience hub rather than just a transactional space. “The future of travel retail is in immersive, personalized, and culturally rich experiences,” the authors conclude.
