In 2022, the global airport retailing market was valued at USD 26.83 billion and is anticipated to experience remarkable growth. By 2033, the market is expected to surpass a significant milestone, reaching over USD 90.23 billion. This substantial growth trajectory represents a significant leap from its projected valuation of USD 29.84 billion in 2023. Throughout this period, the market is forecasted to demonstrate a Compound Annual Growth Rate (CAGR) of 11.7%.
In today’s airports, airport commerce has grown indispensable. It offers a vast array of products and services. Its main objective is to make travel more enjoyable and convenient. It also functions as an effective marketing tool for companies. It makes a substantial financial contribution to airports, particularly those that host low-cost airlines.
The number of people using airports has significantly increased as a result of the increase in air travel worldwide. Airport merchants benefit greatly from this large increase in passenger volume. As a result, it creates more prospects for revenue generation and sales.
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Key Trends And Highlights of Airport Retailing Market
- Surge in Air Passenger Traffic: The steady increase in global air travel has significantly contributed to the growth of the airport retailing market. As more individuals opt for air travel for both business and leisure purposes, the footfall in airports has surged, leading to higher sales in retail outlets located within airport premises.
- Growing Inclination Toward Unique Experiences: Modern travelers are increasingly seeking unique and exotic holiday experiences. This trend has led them to explore diverse destinations, thereby increasing the demand for products and services offered at airport retail outlets, which often showcase local specialties and exclusive items.
- Rising Disposable Incomes: With rising incomes and improved spending capacity among the middle and upper classes worldwide, travelers are more willing to indulge in shopping experiences during their airport layovers or upon arrival. This increased purchasing power has directly contributed to the expansion of the airport retailing market.
- Evolving Consumer Preferences: Consumers today are more discerning and value experiences that align with their personal preferences and lifestyles. Airport retail outlets have responded by diversifying their product offerings to cater to a wide range of consumer preferences, from luxury brands to locally sourced products and unique souvenirs.
- Escalating Demand for High-End Products: There is a growing demand from consumers for high-end and extravagant products, including luxury fashion items, premium electronics, and duty-free goods. Airport retail outlets capitalize on this demand by offering an array of upscale products, attracting affluent travelers and driving sales growth.
- Ongoing Development of Airport Infrastructure: Continuous investments in airport infrastructure and amenities have enhanced the overall passenger experience, including shopping facilities. Renovations and expansions of terminal buildings often include the addition of new retail spaces, contributing to the expansion of the airport retailing market.
- Travel as a Priority Expenditure: Travel is increasingly prioritized as a primary expenditure for many individuals, with a particular focus on exclusive luxury experiences and thrilling adventure activities. As a result, the number of travelers continues to rise, directly influencing sales at airport retail stores and further fueling the growth of the airport retailing market.
Duty-free shopping remains a significant attraction for travelers. The term “duty-free” refers to products available at airports that are exempt from national taxes, duties, and certain local taxes. Airport retailers leverage duty-free regulations to provide competitive pricing. This appeals to customers who are seeking deals and savings. Travelers moving between countries primarily purchase duty-free items like liquors, tobacco, perfumes, fashion, and electronics.
Airports are also embracing the excitement of pop-up stores and temporary retail activations. By offering limited-time opportunities, airports create a sense of urgency and exclusivity, captivating customers’ interest and encouraging spontaneous purchases. Furthermore, airports are introducing experiential retail concepts, such as beauty consultations and product trials, elevating the overall shopping experience to new heights.
Key Takeaways from the Airport Retailing Market:
- The airport retailing industry in the United Kingdom is anticipated to rise, exhibiting a CAGR of % through 2033.
- The United States held a 28.4% share of the global airport retailing industry in 2022.
- With a CAGR of 15.8% over the forecast period, India is predicted to develop rapidly in the airport retailing industry.
- In 2022, Japan had a 5.3% share of the airport retailing industry globally
- The airport retailing industry in China is expected to increase, registering a CAGR of 13.5% over the forecast period.
- Germany accounted for 5.6% of the global airport retailing industry in 2022.
Competitive Landscape in the Airport Retailing Market
Key airport retail industry players are implementing various strategies to enhance their market position and drive growth. A few of these strategies are:
- Demonstrating their commitment to customer convenience by opening new retail outlets in airports worldwide
- Embracing diversity by offering a broad range of products to cater to the unique preferences of travelers
- Engaging with customers through personalized marketing initiatives and social media campaigns
- Expanding into duty-free and luxury segments to provide an unparalleled shopping experience
- Forming strategic partnerships with renowned brands and retailers to enhance product selection and customer experience
- Implementing innovative technologies to streamline the shopping experience
- Prioritizing sustainability by incorporating eco-friendly practices
Recent Developments by Key Players
- In May 2022, Gebr. Heinemann and Highsnobiety formed the joint venture GATE ZERO. This partnership combines Travel Retail expertise and global reach. It all started with a pop-up store by Highsnobiety at Zurich Airport. Now, it has evolved into a long-term partnership between the two companies.
- In March 2019, Mydutyfree and Mumbai Duty Free, operated by Flemingo, announced a partnership. Mydutyfree offers a click-and-collect service for traveling shoppers. The collaboration aims to increase the visibility of Flemingo’s locations among Mydutyfree’s audience in Eastern Europe and the Middle East. The partnership aims to enhance the shopping experience for travelers in these regions.
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Key Segments of the Airport Retailing Market
By Category:
- Fashion & Accessories
- Perfumes & Cosmetics
- Liquor & Tobacco
- Food & Beverages
- Others
By Distribution Channel:
- Direct Retailer
- Convenience Store
- Specialty Retailer
- Departmental Store
By Airport Size:
- Medium Airport
- Small Airport
- Large Airport
By Region:
- North America
- Latin America
- Asia Pacific
- Middle East and Africa
- Europe
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