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Travel retail State of the industry s Travel retail is seeing more new entrants, such as Urban Decay (left), and avant-premières like the launch of Gucci Cosmetics (right) at World Duty Free at London Heathrow T5, ahead of the local market n n n portrays each country. Meanwhile, many beauty houses are placing nationality profle of passengers in specifc Meanwhile, Korean cosmetics brands continue a stronger emphasis on travel-retail. Shiseido for regions. “Brands continue to view this channel to drive growth for Shilla, where beauty sales example, is targeting $1bn in travel-retail sales as hugely strategic due to its size—according to have increased by 40% year-on-year and by 2020 and aims to rank among the top fve industry data, travel retail represents more than account for 50% of its total sales. A Shilla beauty companies. With the launch of its new 25% of global perfume sales, and the channel spokesperson commented: “Chinese customers corporate strategy plan ‘Vision 2020’, travel- is forecast to grow at a faster rate than the prefer Korean cosmetics products that are retail is now an autonomous global structure domestic market,” notes Puig’s Bouchard. manufactured in Korea, therefore Korean beauty In addition, there are a string of new brands in Korean duty-free stores have seen airport stores under development that should strong performances in recent years. Whoo, boost sales. These include Shilla’s Yongsan Sulwhasoo, Hera, and Laneige are among the “ I-Park mall in central Seoul through HDC brands selling well, plus beauty products with Consumers now have access to Shilla Duty Free, a joint venture between Korean medical ingredients.” Shilla & Hyundai Development Company, and brands and products from all the midfeld terminal complex at Abu Dhabi New entrants over the world. It is no longer International airport. A number of new brands have joined the travel- necessary for consumers to retail ranks this year, with many making their Challenges ahead debut with specifc retailers. L’Oréal-owned travel to get what they want at However, challenges lie ahead. E-commerce brand Urban Decay, for example, revealed plans the price they want retailers have been singled out as a serious threat to roll out about 10 to 15 doors in travel-retail to business in the future, with price checking on in Europe, the Middle East and Africa in 2015. smart phones and showrooming earmarked as This follows the opening of its frst airport door ” a particular issue. Cesa explains: “Consumers at Dublin terminal 1 in March at the new The Horizon Consumer Science president and now have access to brands and products from all Loop duty-free outlet operated by Aer Rianta founder Ian Cesa over the world by buying direct from the brands’ International. Growth is also anticipated in Asia websites or through online retailers. It is no and the Americas. longer necessary for consumers to travel to get New entrant Gucci Cosmetics took things and a sixth region headquartered in Singapore. what they want at the price they want. They will a step further in May, launching its highly Shiseido has identifed travel-retail as a priority still shop when they travel, but will use [travel] as anticipated cosmetics collection with World Duty for the expansion of its cosmetics brands, a way to learn about new products rather than Free at London Heathrow T5. WDF was the frst particularly in Asia. buy products they know. Savings compared to global travel retailer to offer the line and the The future is promising for beauty, and home will still drive what people buy, so currency exclusive retailer in the UK ahead of the local Horizon’s Cesa predicts that if the sector fuctuations will have a signifcant impact.” market, and will remain so until December. Until continues to perform as it has done for the Creating an offer that can’t be found anywhere then, the only other way to purchase the range past two years it will continue to grow, but else, either online or offine, will be crucial to in the UK is through the Gucci website. not everywhere—much will depend on the capturing and growing consumer spend. n 94 November-December 2015 - N°24 - BW Confidential