With the ongoing COVID-19 pandemic continuing to wreak havoc on the aviation industry, the International Civil Aviation Organization (ICAO) estimates that global international traveler traffic could decline by 1.2 billion passengers (two-thirds) by September 2020.
That not only bears bad news for the airline industry, but also the airport retail industry, which has historically remained immune to the challenges brought on by growth in eCommerce and for years had maintained healthy growth. In 2019 alone, the global airport retail market generated $44 billion in revenue.
While some of the major airport hubs in the U.S. and around the world have looked to offer relief to airport, dining and retail (ADR) tenants, these establishments are facing a long road to recovery and perhaps one that requires them to pivot how they operate going forward.
One good example of a travel retail business taking an innovative approach to handling the decline in sales is that of South Korea’s Lotte Duty Free. The store chain, which runs tobacco and liquor concession at Singapore’s Changi airport, began selling duty-free products through the airport’s eCommerce platform iShopChangi to both travelers and non-travelers. The company joins a list of 13 other brands, including Tommy Hilfiger and Swarovski that are now selling duty-free products and offering free delivery to Singapore residents through the airport’s retail website. Reports indicate that sales made through the airport website has been playing an instrumental role in helping maintain the retail revenue.
Before the coronavirus pandemic took hold, the Changi airport was one of the busiest travel hubs in the world serving close to 65.6 million travelers annually.
While travel retail may have historically remained unaffected by eCommerce, offering an omnichannel experience that allows travelers to seamlessly shop and pay is going to be critical not just for surviving the ongoing crisis, but also thriving in a post-pandemic world.