1. Thinking Global
China and India will continue to rise in prominence within TR. The renaissance within US airports will pick up pace, continuing with
its very qualitative F & B offer, finally capitalising on its potential for retail. Africa’s sleeping giant will start to stir. South American duty free and Brazil in particular will start to become more interesting prospects for brands versus a route to ‘market in the past’.
The only threats appear to be the continuing protests in Hong Kong (will Hong Kong’s decline sadly become a reality?) and the current escalation of events within the Middle East.
2. The only constant is change (for good).
Perhaps the most significant development for businesses and brands will be anti-trust laws and legislation on issues such as data,
health (sugar, alcohol, fat, salt), environment (CO2, air/noise pollution etc), plastic, child labour, animal testing, gambling, mis-
representation. This is being driven not just by government, but by increasing animosity from consumers towards big brands, big
firms, faceless and unaccountable organisations. Fashion has been the latest sector to experience negative reaction on these
issues. Social media and celebrities are championing change.
Consumers will increasingly turn to brands that are transparent and demonstrate a social conscience and a bigger societal and environmental purpose. Conversely, consumers will shun brands that are secretive and whose sole focus is to sell, with little regard for the impact their product has on the environment and communities.
Expect to see a rise in more, smaller start-up private labels emerging, as well as recyclable packaging and CSR initiatives to the fore.
3. East meets East
Japan starts to warm up for the Olympics and the PRC traveller starts spending money again.
South Korea and diagou will continue to be a ‘close your eyes and hope for the best’ view from Korean Duty Free operators.
4. Brand dynamics – P & C
The beauty category is already starting to see a shift in hierarchy, particularly within skincare and cosmetics, and the new kids on the block are already starting to eat into an already overcrowded marketplace. The successful launch of Charlotte Tilbury in TR in 2019 is an excellent example, with many others circling for a 2020 splash.
The large houses will either have to make way or buy them. There are also a number of Asian brands looking to break the western dominance, such as Marie Dalgar (Chinese cult beauty brand), Shiro-shiro (Japanese organic) and Vidivici (South Korean Cosmetics). The spaces previously reserved for the Top 20 global brands/houses will no longer be a foregone conclusion during planning and set up of future offers. This shift has already started on the high street.
Brand dynamics – Tequila’s time
Gin is booming, we know, and that is not set to finish. But with big-named companies such as Diageo investing in tequila, alongside celebrities such as George Clooney, The Rock and Nick Jonas, the iconic Mexican spirit is on the cusp of a breakout.
2020 will also see a good year for Remy Cointreau.
5. General TR dynamics
Spend per pax will grow – largely driven by luxury and a fall in other categories
Digital spend at airports will also grow and will reach double digits at several categories
6. Retailers of interest
Lotte Duty Free, Lagardère, Aer Rianta, Heinemann, Unifree and ATU.
Is Harding Retail up for sale?
LVMH will make big push for Tiffany into airport retail.
7. CDFG’s next acquisition?
Are DFS and Sky Connection likely targets in 2020?
8. More space for airport ‘Labs’
2020 will see the continued emergence of airport labs. These labs are a concept that straddles all categories, bringing together multiple brands and products that complement each other together in one market place, offering quick and easy selection, purchasing, payment and delivery options. Whilst this is not new, ‘Smart Retailing’ is growing in popularity. A great way of effectively using the airports as global shopping windows.
9. Inflight retail takes off
Having seen an exodus in past years, 2020 will see a resurgence of inflight retail, when airlines will get back into travel retail in a big way via e-commerce. Singapore airlines and Air Asia have already shown the way, but more will follow.
Staying with airline developments, watch out, too, for the emergence of the ULCC – the ultra low cost carrier. Unlike low vacation services offered from smaller airports in the US to locations like Florida and Las Vegas, this will service routes between major metro areas. Apparently Sun Country and Spirit are considering. And what starts in the USA…..
10. More pop-ups popping up
Brands like to control their space and look, while shoppers like a branded and personalised experience. So expect to see a lot more airport pop-ups in 2020. They have now come of age and definitely add value to the overall customer experience.
11. Airport contract overhauls
Expectation from airports will change and become more focused on a new set of criteria that will determine future tender awards and space allocations, using a different matrix of priorities that are less focused on revenue only. In a bid to eradicate all single-use plastics, produce only recyclable waste, offset all carbon footprints and promote community ecosystems wherever possible within the supply chain, favour will be given to partners who embrace all of the above within their offer. Airports will increasingly realise the importance of consumer confidence and support in their green initiatives and the need to publicly advertise that approach (with a few exceptions, airport marketing is extremely poor). Trip Advisor will likely change its review criteria to better highlight environmental and sustainable initiatives.
12. Airports and online giants
There will be a partnership between Amazon or Ali Baba and an airport operator. In a bid to obtain some of the revenue lost to online purchases when customers leave the store, retailers will encourage potential buyers to order products from Amazon, Ali Baba or the store itself while they are present – for the same guaranteed price. Technology can track where the order originated from, ensuring the outlet gets a share of the transaction. This essentially provides the online giants access to physical showcases within airports.
13. Cashless Duty Free
The first completely cashless Duty Free store will open, with all space given to product, eliminating queues and till points. This is not new in the high street, but it is essential to enhancing the airport retail experience – especially for passengers who have an extremely tight transit window.
14. Making staff count
In the face of increased pressure from digital, specialist store staff are becoming the difference-maker in travel retail stores. Just witness the success of Heinemann’s Exquisite store at Amsterdam Schiphol Airport for proof.
15. Snacking time
With inflight F & B propositions falling and failing, and time at a premium, more and more shoppers will turn to in-store snacking brands and the confectionery sector to fill the gap.
16. Viva Vegan!
2020 will see a more comprehensive Vegan explosion – influencing menus, restaurants and designs. This will help bring in some fresh blood to further enhance the culinary selection dominated by the very short list of current F & B operators. Some airports will finally concede that a ‘street food’ style up and execution to complement their restaurant line-up is not only doable, but essential to keep up with the ever adventurous palates of the younger travelling profiles. A challenge to the lengthy airport contracts traditionally offered, yes, but one potentially facilitating 6 -12 month opportunities for fresh operators.
17. Brexit plus plus
The final arrival of Brexit (!?) will fuel a renaissance of UK Duty Free, seeing the ferry channel spring back to life as well as UK airports increasing Duty Free space – a good thing. Even Ryan Air will get into the act.
18. Cannes – there you go!
However important to the industry TFWA’s Cannes week is – and it is – there is no escaping the fact that it is an extremely expensive week for all attending and notably for the brands. Will 2020 be the year when TFWA finally gets out of its comfort zone and starts looking seriously at alternative locations?
19. Benefit Corporations
2020 will see the growth of ‘B-Corps’ – Benefit Corporations. These are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community and the environment.
These firms focus on ‘Triple Bottom Line’. Here the value of the firm and metrics of success is not limited to the single measure of bottom line profit. Rather, the triple bottom line has three parts: social, environmental and financial, whereby performance is evaluated from a broader perspective to create greater business value.
These three parts are also referred to as the ‘Three P’s’:
‘Profit’ (financial) – the financial profit the firm achieves
‘People’ (social) – where value and success are measured through the development of employees and welfare of customers, suppliers
and communities that are impacted by the firm
‘Planet’ (environmental) – where value and success are measured through the firm’s sustainability strategy and actions on issues such as carbon emissions and other impacts on the planet
20. What 2020 customers will be like
They will be smarter and the gap between what they expect and what they actually get is widening for some companies in TR
They will walk away faster – especially when they experience bad customer service
They will use smart speakers more
They will understand, evaluate and use omni-channel far more
They will be subject to more AI (but better used in back office, not customer-facing)
They will make choices for convenience