Puzzling Through Travel Retail’s Dilemmas

12:14 AM ETDeveloping

Entertainment Desk

In Short: The travel retail sector is struggling with declining revenue and changing consumer priorities, as highlighted at the TFWA World Exhibition & Conference.

At the TFWA World Exhibition & Conference in Cannes, France, the travel retail industry is facing significant challenges, including a 20 percent drop in retail revenue per passenger since pre-COVID times, according to Sarah Branquinho, the new president of TFWA World Exhibition & Conference.

Branquinho emphasized that simply welcoming more passengers is not enough. Conversion rates are low, especially among younger travelers who prioritize experience over purchasing.

Mette Engell, senior vice president of global travel retail at Coty Inc., noted that 39 percent of travelers are now Gen Z and Millennials, whose conversion rate is below average in airports.

Eva Yu, president of L’Oréal travel retail, stated that younger consumers are changing the rules of travel retail, highlighting the need for a shift in strategy.

The once-lavish spending by Chinese consumers has shifted towards more local travel and different shopping habits, impacting the industry's revenue.

Fragrance and cosmetics remain the top category in travel retail, generating $24.5 billion last year, a 3.2 percent decrease from 2024, according to Generation Research.

Branquinho stressed the importance of reinventing the travel retail proposition around price, assortment, and experience to cater to a broader mix of traveler profiles.

Britta Hoffmann, global commercial director of beauty at Gebr, noted the need for differentiation in travel retail, as consumers are increasingly connected to screens and seek unique experiences.

Felipe Grant, president of global travel retail at Puig, highlighted the challenge of connecting with consumers who are constantly online, suggesting the opportunity to introduce new brands and assortments.

Antonin Carreau, global director of beauty at Avolta, noted that younger consumers need to consume beauty differently, indicating a shift in consumer behavior.

The industry is now competing not just with high street prices but also with global platforms like Amazon, Rakuten, and Tmall, adding to the complexity.

Branquinho concluded that travel retail stands at a defining moment to reinvent and transform, focusing on creating more connected, sustainable, and human experiences.

What this adds

The conference highlighted the need for travel retail to adapt to the changing priorities of younger consumers who value experience over traditional purchasing.

What's still developing

“For us it’s an opportunity to bring new brands, new assortment, but also a powerful brand within our brand to talk to consumers who might not have been buying in duty-free because they might think it’s not the right offer, it’s not exclusive enough,” Hoffmann said.
Today, they are less apt to purchase beauty in travel retail than their elders.
Over the past year alone, it has been buffeted by phenomena such as geopolitical uncertainty — especially in the Middle East — trade tensions, exchange-rate volatility, consumer confidence pressure, and disruption across travel and supply chains.

Sources

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