The Shifting Strategies of Luxury Duty-Free Retailers
Photo Credit: Duty-free shopping in Melbourne Airport. Retailers are looking at new ways to compete with online sellers. Melbourne Airport
Skift Take
With competition from online retailers rising, airport duty-free shops selling luxury goods need to up the ante. Some methods they are using seem to be successful, while others may start annoying potential customers.
The profits of duty-free airport shops are often impacted by circumstances beyond the retailer’s control. Anything from exchange rate fluctuations to updated weight restrictions on luggage to international politics can have a drastic effect on luxury sales in particular. Then there’s the growing competition from the online world, where luxury discounters are proliferating. What’s a duty-free operator to do to compete?
According to Switzerland-based Dufry, which runs 2,200 duty-free shops in 64 countries, the international duty-free industry is expected to grow to about $67 billion by 2020, from an estimated $45.7 billion in 2016. Dufry forecasts the Asia-Pacific market will experience the greatest growth, with predicted sales in 2020 doubling the numbers seen in 2014.
But for that forecast to come true, Dufry and its ilk have to become smarter retailers in order to keep up with the competition. That's why several duty-free conglomerates are turning to technology.
Hong
