‘Tis the season to be shopping

Decked up interiors, hopeful passengers, and cheerful staff, airports across the world come to life with a contagious festive spirit. And, if there is one location within an airport which draws most travellers, it is the retail section. 

It is a much known fact that travel retail is the largest contributor to non-aeronautical income in an airport. It also goes without saying that it is a crucial aspect of airport experiences that most passengers look forward to. Along with being a service, the duty-free retail goods are an important revenue generator. 

According to industry experts, there has been a sharp increase in international travellers passing through airports each year in the post COVID era, a number which is expected to keep growing annually. 

The 2024 ACI World Annual Airport Traffic Report anticipates a 10% increase in worldwide passenger traffic, predicted to reach 9.5 billion by the end of the year. By the mid 2024, passenger traffic had reached 102% of what it was before the pandemic, with international traffic showing a 17% increase compared to the previous year.

Driving the growth in airport retail, rising passenger traffic has prompted airports to build large duty-free areas, serving the growing population of international tourists. Airports are investing heavily to build infrastructure which offers a realm of opportunities for brands to amp up their travel retail footprint to meet the rising demands of this traffic and enhance travel experiences.

With expanded infrastructure and retail areas, travel retail is set to prosper during the ongoing recovery of worldwide air traffic. Introspective Market Research has unveiled its latest market study, titled Travel Retail Market, providing a comprehensive outlook on the future of this premium delicacy. 

According to the report, the global travel retail market was valued at USD 6802.40 million in 2023 and is poised for significant expansion, with projections indicating a climb to USD 17018.26 million by 2032. This anticipated growth represents an impressive CAGR of 10.34% from 2024 to 2032.

Dubai Airports – a popular choice among shoppers

As the holiday season kicks in, the airport retail operators leave no stone unturned to bring the best to the passengers moving through their airports. 

The growth of airport retail sales during the festive season can be attributed to several key factors. There is an increased number of passengers going through airports in both inbound and outbound directions as well as transit. 

“DDF expects more than 260,000 passengers to pass through the airport every day in December. People visit family in their home countries or go on vacation, and of-course visit Dubai for its amazing attractions. Dubai was also voted as the number one tourist destination on TripAdviser two years in a row,” said Ramesh Cidambi, Managing Director of Dubai Duty Free (DDF).

Airport retail sales witness a bullish trend, all thanks to the concept of gifting tradition during the holiday season. 

This season typically sees an increase in product promotions, new product launches, and travel retail exclusives that are only available at Dubai Duty Free,” Cidambi added.

DDF has also increased its presence on social media and has a more active e-commerce site. The website’s Click & Collect offer enables passengers to reserve popular items ahead of time. Additionally, targeted digital media campaigns foster customer engagement, driving interest in our extensive product offerings both online and in-store.

“Our retail offer is made more attractive during the festive season. The visual merchandising team in the shopfloor make our shops look more beautiful on key occasions such as Diwali, Chinese New Year, Eid, and of course Christmas, with great decoration, and featuring the most popular products or gift ideas,” Cidambi added. 

In the grand scheme of things, preparations for managing the busiest travel season at airports usually go unnoticed by all. However, Cidambi acknowledged that “the hard work and dedication of the fantastic team of employees in the shop-floor and back-office helps in providing great service to the passengers.”

Airport retail sales takes flight in India

The end-of-year period sees a significant rise in travellers in India, both domestic and international, as people travel for family holidays, business, or leisure. 

Bengaluru Duty Free, a prominent player in the country’s travel retail sector, strategically leverages the holiday season to offer unique shopping experiences. 

This travel season naturally boosts footfall at Bengaluru’s duty-free shops, where travellers look to make festive purchases. From curated gift sets to discounts on high-end liquor, these promotions attract shoppers looking to buy premium gifts at competitive prices.

“Many travellers also use the opportunity to buy last-minute gifts, taking advantage of duty-free prices and exclusive airport deals. Retailers offer special holiday discounts and promotions, which attract more shoppers. Delays and longer layovers during the busy travel season give passengers more time to explore retail options,” Lal Arakulath, CEO of Kreol Group said.

Consumer behaviour trends during holidays

During the holiday period, consumer behaviour with respect to airport retail often reflects broader trends influenced by social, economic, and cultural factors. Consumers tend to buy more products that are suitable as gifts during the festive season. 

This can include luxury items, cosmetics sets, perfumes, chocolates, and local specialties. In addition, the desire for luxury and premium brands is another trend, as consumers frequently seek out these items, especially as gifting becomes a priority and duty-free retailers often stock exclusive or limited-edition items. Offering personalised services, such as engraving or bespoke packaging, further enhances the shopping experience for gifting.

“As travellers increasingly seek memorable experiences in travel retail, we have collaborated with several brands to bring innovative and unique retail concepts, including pop-up gifting stations, tastings, and product sampling, such as the Glenfiddich and Moet & Chandon high profile promo areas,” Cidambi pointed out.

“Shoppers are more inclined to purchase high-end items, including rare whiskies & luxury perfumes. Limited-edition items, like the City Series whiskies exclusive to Bengaluru Duty Free, create a sense of urgency and exclusivity among travellers,” Kanth said.

“Consumers are increasingly seeking personalised products and services, such as custom engravings on luxury bottles or specialised gift wrapping. Bengaluru Duty Free’s ability to cater to this demand sets it apart from traditional retail outlets.”

Additionally, as travellers become more eco-conscious, the demand for sustainable, ethical products rises. Bengaluru Duty Free has incorporated more eco-friendly options, from organic snacks to products with minimal packaging, aligning with the growing trend of responsible consumption.

Speaking of trends, Arakulath had an interesting take on consumer behaviour at airports, “With inflation impacting budgets, travellers are more inclined to seek out discounts and promotions. There’s also a growing trend towards spending on experiences rather than just products, such as holiday-themed events and dining.”

Technology aids retail sales

Airport retail is undergoing a continual change, integrating technology to provide a seamless customer experience in our stores. 

For instance, Dubai Duty Free has introduced self-checkout counters across several of our duty-free locations and the “Scan, Pay & Go” solution, which empowers customers to complete transactions using their own mobile devices, eliminating the need to wait in queues, both of which have received positive feedback. This convenience is appealing, especially during the busy holiday season.

“Our customers are increasingly more discerning, tech-savvy, and intentional in how they approach airport shopping, and our job is to stay ahead of the curve and provide them with a unique and enjoyable experience,” Cidambi said.

Tech-driven solutions offer convenience at the passengers’ fingertips. A well-designed mobile app would allow travellers to easily browse products, pre-order items for quick pickup, and access tailored promotions based on their preferences or travel history. 

“Bengaluru Duty Free has introduced features like the Whiskey & Fragrance Finder, which helps customers select products by answering a few simple questions based on their tastes, and the Cosmetic Virtual Try-On, where passengers can virtually try on a variety of cosmetic options available in-store,” Kanth stated.

These innovations enhance convenience, especially for those with limited time before their flight, allowing passengers to quickly find and select the perfect items.

Arakulath added, “More consumers are using mobile apps and online platforms to browse and buy airport retail offerings ahead of their travel.”

What’s trending?

One of the most unexpected and unique items that has gained popularity in Dubai Duty Free in recent weeks is the gourmet food items that have a cultural significance or are tied to pop culture trends, like the viral pistachio kunafa-flavored chocolates, commonly referred to as the ‘Dubai chocolate’. 

“We currently offer two local brands, Locali and I Love Dubai for which on an average day, we do about AED 300,000 in revenue between them.  We are going to have the third brand—the Fix Dessert Chocolatier. These products have increasingly become sought after as indulgent souvenirs,” said Cidambi.

In terms of category-wise sales, perfumes remain DDF’s top selling followed by liquor, gold, cigarettes, tobacco, and electronics. These top categories are supported by a strong brand line-up and a wide product range particularly on liquor, which is one of DDF’s key strengths.

Luxury beauty products attract enthusiasts, while tech gadgets cater to modern travellers. Gold and jewellery are favoured for unique investments, added Cidambi.

Adding to this, Kreol Group CEO said, “Perfumes, cosmetics, spirits, and wines are always top sellers. Luxury goods such as high-end watches, jewellery, and designer accessories often see a spike in sales. Gadgets like headphones, tablets, and travel adapters are also frequently purchased items. Travellers also opt for local delicacies and souvenirs as gifts, which includes seasonal confectionery treats such as mini gingerbread cakes and festive chocolates.”

Bengaluru Duty Free, during the festive season, sees a rising demand for regionally inspired, culturally rich gifts. “While luxury items often take centre stage in holiday retail, more and more travellers are drawn to products that showcase local heritage, such as handcrafted chocolates and exclusive Bengaluru whiskies from brands like Amrut, Indri, Paul John, and Rampur,” Kanth said. 

These items not only appeal to international visitors looking for distinctive souvenirs, but they are also seen as special, limited-edition gifts. Adding to their allure, these exclusives are highly coveted by collectors, making them even more desirable for those seeking something truly unique.

Ultimate holiday shopping experience

“I think we come very close to providing the ultimate shopping experience at Dubai Duty Free at Dubai International Airport. Certainly passengers have great accessibility to a huge range of brands and products, the shopping environment is festive and welcoming and our sales staff do a fantastic job in helping customers find exactly what they are looking for, which they appreciate,” Cidambi said. 

According to Kanth, an ideal holiday shopping experience at Bengaluru Duty Free would combine convenience, personalisation, and a festive atmosphere. 

“At Bengaluru Duty Free, the entire shopping area would be decked out with vibrant, holiday-themed décor—think trees, lights, and a life-sized robotic elephant that creates a warm and inviting atmosphere. Interactive installations or live performances would add an experiential touch for travelers, encouraging them to spend time in the store,” Kanth said.

Moreover, offering a wider range of limited-edition and exclusive holiday items—like custom-made gifts with purchase, exclusive liquor collections, or festive gift sets—would elevate the experience. 

Also, a gifting service providing personalised wrapping, engraving, or even gift recommendations based on travel destination would cater to busy travellers looking for a thoughtful, high-quality gift.

Bengaluru Duty Free has consistently leveraged key trends during the festive season to create a dynamic and attractive shopping environment for travellers, said Kanth. 

Undoubtedly airports go all out to create a festive shopping experience.

“Airports are transformed into winter wonderlands with lights, decorations, and holiday music to set the mood. Holiday markets and pop-up shops featuring local artisans, festive foods, and unique gifts are set up. Activities like gift-wrapping stations, photo booths with holiday themes, and live performances engage travellers. Seasonal menus and holiday treats in airport restaurants and cafes enhance the festive experience,” Arakulath signed off.

Did you know?

According to Lal Arakulath, these are the most popular gifts besides the usual confectionery: 

* Travel accessories such as neck pillows, travel adapters, and portable chargers 

* High-end perfumes, watches, jewellery and limited-edition spirits and wines 

* Unique local products, such as regional delicacies or handcrafted items

* Noise-cancelling headphones, tablets, and smartwatches

* Gifting experiences such as spa vouchers or dining experiences available at the airport