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travel retail A nugget that is becoming important. This is how Laurence-Anne Parent, a senior partner with Advancy responsible for its retail and consumer goods practice, describes travel retail. A growing market amidst a retail sector that has been severely hit by the crisis.

The industry, commonly called duty free a few years ago, has changed dramatically. For the past ten years it has boasted growth of 10% a year and a global turnover of 70 billion euros, which is expected to reach 110 billion by 2020.

From duty free, the tax-free purchasing of capital goods, travel retail has become a distribution channel in its own right

We make the difference in this market thanks to the firm’s global approach, which is focused on content, the high value added stakes for our clients, and the partners’ real involvement in the missions,” explains Laurence-Anne Parent.

In less cushioned terms, the strategy firm founded in 1999 by Éric de Bettignies, like her an A.T. Kearney veteran, has made a nice name for itself in this area, regularly snatching promising missions away from strategy’s traditional heavyweights. “Within the Advancy network, the Parisian office is the one with expertise in retail and luxury goods. We have an “omnichannel” approach to both pure players and businesses.

Brands previously had three points of contact with clients, but now there are fifteen or twenty, from internet sites, blogs, Instagram…” continues the senior partner.

An increasingly essential channel

It is in fact in the context of a broader reflection on development strategies for brands seeking growth opportunities that the firm found itself walking down the path of travel retail. “It is located at the crossroads of shops and the internet. People are willing to travel to shops, and for that reason they want to have an unforgettable experience. On the internet, the brand comes to them. With travel retail, the brand moves to meet travelers, through physical means,” comments Laurence-Anne Parent.

Long skeptical of purchases made in these transit areas, the major luxury brands are taking an increasing interest in this market.

Indeed, it mostly involves an affluent clientele that must be provided with the same level of service, regardless of location. Travel retail – which in addition to airports involves train stations, for food brands or more middle market ready-to-wear clothing, or touristic sites such as the Fondaco dei Tedeschi in Venice – is becoming an increasingly essential channel. A sign of the times: L’Oréal, for one, has assembled a dedicated team.

Three players with convergent demands

Brands are not the only players in travel retail. Today, it generates up to 50% of an airport’s revenues. And requests for advice vary in nature depending on who is asking. “The airports are focused on making security checks more fluid so as to optimize travelers’ down time. The operators who organize these spaces want to be supported in optimizing their offerings through requests for proposals, or to help beautify spaces in which they are already installed. As for the brands, they are looking at their own channels and what locations they should favor. Travel retail can also present an opportunity to test new products on citizens of different countries or to offer limited editions. The players therefore have an interest in working together, for instance by sharing their data,” suggests Laurence-Anne Parent.

Travel retail is brimming with new ideas. As an example, the Singapore and Hong Kong airports offer travelers the opportunity to pick up their shopping upon their return, or even to have it shipped to their homes.

Is Advancy able to apply its founder’s valued principle, to never work for competing clients, despite being heavily solicited by these three kinds of players? “As standard bearers in the retail and luxury sectors, we are contacted by players involved in the same markets. We are very strict about confidentiality issues and non-compete clauses. We never work on identical topics for competing companies. Chanel knows we work for Hermès, and vice versa,” assures Laurence-Anne Parent.

Gaëlle Ginibrière for Consultor.fr

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