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Travel retail industry takes a beauty boost

By Andrew McDougall , 16-Feb-2011
Last updated the 16-Feb-2011 at 18:07 GMT

The success of beauty and fragrance products in the travel industry looks set to continue and will urge retailers to change the way they approach the market, according to market research company Verdict.

According to a report from Verdict, the global airport retail market will become one of the best performing in retail and is set to grow by more than 60 percent by 2015 to be worth $44.1 billion.

And within retail, the report states that it is beauty sales which have a strong outlook and have emerged as the fastest growing category, expecting 80 percent growth in the next five years.

“Beauty is one of the key drivers of growth for airport retailers,” said Anne Marie Davis, an analyst at Verdict.

“To take full advantage of this potential, airport retailers will need to rely less on passing footfall. Instead they should engage with consumers more and invest in new channels such as home delivery and Collect on Return services.”

The growth has been driven in the Asia Pacific and the Middle East & Africa regions. Verdict says this is because neither region was as badly affected by the down turn as mature markets, such as the US and Europe.

Big brands already setting the pace

Throughout the cosmetics industry, many companies have been capitalizing on this rising market, and beginning to see the rewards.

Beauty supplier Estee Lauder recently announced its fourth quarter results and reported that sales were up in all geographic regions and product categories, led by international businesses ‘particularly in travel-retail and emerging markets’.

“The company's travel-retail business generated significant net sales and profit growth during the quarter, resulting from successful product launches, increased distribution and cost containment,” the company said in a statement.

Last year Beiersdorf also announced its travel retail strategy stating it will introduce over 65 products and a variety of exclusive travel sets to be sold on airplanes, in airports, and on ferries and cruise lines.

The newly founded travel retail division, headquartered in Switzerland, will implement the expansion of the company’s international travel retail activities initially in Europe, before reaching the Middle East and Africa, followed by Asia and the Americas.

“Approximately 70 per cent of passengers currently buy nothing at all at the airport. This implies that the product range offered today in Europe simply does not meet their wants and needs,” Ilka Schütte, director of global travel retail at Beiersdorf, told CosmeticsDesign.com USA.

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