MILLENIALS DRIVING SALES IN THE TRAVEL RETAIL INDUSTRY

The travel retail sector is experiencing a remarkable boom, and at the forefront of this surge are millennials, poised to be the industry's game-changers. Predictions indicate that the global travel retail market is on track to reach a staggering $120 billion by 2030, and that millennials will be responsible for a substantial 40% of all travel-related expenditures. To go one step further, the Asia Pacific region is expected to be the fastest-growing market for travel retail, with a CAGR of 10.8% from 2023 to 2030.

 NB: If you were born between 1981 and 1996 like me, you are a millennial.

THE MILLENIAL PERSPECTIVE

So, what exactly is fuelling this wanderlust among millennials? Several factors come into play. Firstly, millennials are more likely to be single and carry fewer financial responsibilities compared to previous generations. This translates to greater disposable income, making travel a more accessible and enticing option. Secondly, millennials are increasingly prioritizing experiences over material possessions. They crave fresh adventures, favoring the creation of memories over the mere acquisition of things.

But it doesn't stop there. Sustainability has also become a focal point for millennials in their travel choices. Their heightened environmental consciousness drives them to seek eco-conscious travel options to ensure their adventures don't harm the planet.

In light of these trends, millennials are raising their expectations from the travel retail industry. They demand immersive experiences, personalized services, and sustainable alternatives.

LATEST TRENDS

Let's dive into some of the latest trends in travel retail that are resonating particularly well with millennials:

Experiential Retail

A Mastercard study discovered that millennials prioritize travel for experiences rather than material possessions, emphasizing their affinity for sustainable travel like glamping (glamour + camping). This trend involves crafting immersive shopping experiences, such as virtual reality tours and interactive exhibits. For instance, the Dubai Duty Free has introduced a virtual reality experience that enables shoppers to explore renowned landmarks worldwide such as the Eiffel Tower, the Great Wall of China, and the Taj Mahal.

The experience is not only visually stunning, but it also allows shoppers to interact with the environment in a way that is not possible in real life. For example, visitors can walk around the Eiffel Tower or even climb to the top.

Sustainability

Concerns for the environment drive millennials to support retailers committed to sustainability. In May 2023, LVMH Travel Retail, the travel retail arm of luxury goods conglomerate LVMH, announced that it would be launching a new sustainable packaging initiative. The initiative will focus on using recycled materials and recyclable packaging for its products.

From a Visual Merchandising point of view, Travel Retailer can appeal to this by using sustainable materials and practices in their visual merchandising displays. This could involve using recycled materials, energy-efficient lighting, or water-saving features. For example, the Heathrow Airport has a number of energy-efficient stores, including a duty free store that uses solar panels to generate electricity. 

Personalized Service

Millennials seek individualized attention from retailers, aiming to feel uniquely valued. Consider the "Travel Buddy" service at Singapore Changi Airport, which offers personalized recommendations to shoppers based on their interests. 

Technology

Insights from the Global Consumer Insights Survey highlight millennials' preference for using technology to plan their trips and their susceptibility to social media influence in making travel-related decisions. Tech-savvy millennials expect convenient, user-friendly digital experiences from retailers. A good example is Inflyter's departure duty-free shopping and pick-up on arrival feature, which aims to transform the traditional travel retail landscape. This streamlined process eliminates the need to carry items during the journey, providing greater convenience and reducing potential travel hassles.

These trends are merely a snapshot of what's currently captivating millennials in the travel retail space. As this influential generation continues to shape the industry, we can anticipate even more ingenious and imaginative approaches to capturing their attention.

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