Luxury brands target travelling consumer

Luxury brands target travelling consumer

An increasing number of luxury brands aknowledge the importance of being near travelling consumers and open stores in airports or on cruise ships. This sector sees plenty of growth possibilities because of the growing number of Asian travelers.

Turnover grows steadily

'Travel retail' turnover, including sales on airplanes, has increased 9.4 % in 2012 to 55.8 billion euro, according to a Generation Research study. That same study estimates 2013’s turnover to reach 60 billion euro, with a possibility of 120 billion by 2020.

 

This channel is becoming very important,” said Bruno Pavlovsky, chairman of Chanel’s fashion division: “Customers are spending time in airports where the environment has become increasingly sophisticated.” Chanel has five boutiques in airports (4 in Asia and 1 in London Heathrow), with two more next year (Paris and Dubai). Gucci has also opened stores in the same locations recently.

 

Several brands focus on travel

L’Oreal has even created a Travel Retail division, which focuses entirely on sales in airports, on cruise ships and similar locations. The company compares travel retail to a sixth continent, as that division’s turnover represents 15 % of the company’s total turnover.

 

Luxury giant LVMH wants to launch a new travel retail concept called Galleria in 2016, with Venice as the location for its very first store. The like-for-like revenue in ‘travel retail’ grew 19 % in the past 9 months, while fashion and leather (containing Louis Vuitton among others) only grew 4 %.

 

Chinese tourists source of income

Worldwide tourist expenditure has risen 12 % from January onwards, with Chinese expenditure in Europe alone going up nearly 20 %. The Chinese are claimed to be responsible for almost a third of worldwide luxury purchases, while they were a virtually non-existent market a decade ago.

 

Chinese tourists went on nearly 500 million trips (both domestically and abroad) in 2012. The total expenses for these trips reached nearly 190 billion euro, numbers analysts see going up to 1.7 billion trips and 1.3 trillion euro by 2030.

 

 

 

 

(Translated by Gary Peeters)

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